United Arab Emirates investor Abraaj Capital has held a final close of the Abraaj Real Estate Fund LP on $100 million (€75 million).
The vehicle, which held an initial close on June 30, was met with strong demand, according to a source close to the firm, and closed ahead of its December 31 target date. The fund received commitments from a number of high net worth individuals and institutional investors in the Middle East region, the source said.
The new fund is Abraaj’s first foray into real estate. The Dubai-based firm currently manages the largest buyout funds in the Middle East region with $150 million in committed capital through two private equity funds, the $116 million Abraaj Buyout Fund and the $34 million Special Opportunities Fund.
Commenting on the close, executive director of Abraaj Shirish Saraf said that the closure of the fund before the end of the year was an indication of the strong interest that the region’s real estate market was attracting.
The fund has completed one transaction to date, acquiring a ten percent stake in United Arab Emirates-based Arab Technical Construction Company for AED40 million (€9 million; $11 million) in September.
According to Abraaj, the fund will invest in leisure, tourism and residential projects as well as some office and industrial developments across the Gulf Co-operation Council region and other parts of the Middle East.
The firm plans to draw down 25 percent of commitments upon subscription, with the remaining capital to be deployed over a four year period.
Real estate activity in the region is on the increase as evidenced by current efforts to create a new financial exchange in Dubai. The Dubai International Financial Centre is expected to be completed by 2007, creating 50,000 jobs and comprising 45 buildings on a 110-acre site in the main centre of Dubai.