QInvest, Qatar's leading private investment group and one of the region’s most prominent Islamic financial institutions, announced yesterday its collaboration with a GCC institutional investor to create and launch the Magnolia Real Estate Fund(the Magnolia Fund) which completed its first acquisition of an outstanding asset in Colorado, US. The acquisition was funded using an Ijarah property debt structure provided by Freddie Mac.
The Magnolia Fund is focused on investing in the fast-growing, income-generating multifamily residential market in the US, which is experiencing its seventh consecutive year of growth. The Fund is building a portfolio of assets in the sector and plans to make more acquisitions during 2017. The newly acquired asset is located in Fox Creek, Thornton, a northern suburb of Denver, Colorado in the US. The asset is projected to yield net cash in excess of 8 percent on annual basis and a net IRR in the range of 12-13 percent.
Commenting on the acquisition, Tamim Hamad Al-Kawari, Chief Executive Officer of QInvest, said: “Today’s acquisition is part of our strategy which proactively responds to demand from GCC-investors for access to US real estate market in a Sharia’a compliant manner. By focusing on the multifamily space, one of the fastest growing segments in the US real estate sector, we are confident that we can offer regional investors higher than average, targeted risk-adjusted returns with the benefits of a structured platform that ensures proper management of assets and diversification.”
Craig Cowie, Head of Real Estate at QInvest, said: “We are targeting value-add multifamily investments in strong submarkets within the US. The targeted annual net cash yield and net IRR exceeds average returns usually achieved in real estate equity investments. In addition, structuring this investment within an Ijarah framework has been a deliberate effort on our part, leveraging our value-oriented investment approach, to offer a unique platform for GCC-based investors to enter a very exciting market.”
David D. Kent, Managing Partner of the Magnolia Real Estate Management, added: “GCC investors that wish to gain exposure to such exciting investment opportunities are best placed to direct their investments through a platform like the Magnolia Fund”.
