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Al Rajhi Capital, the investment arm of Saudi Arabia’s Al Rajhi Bank, and Arcapita Bank, based in Bahrain, have launched a US $500 million (SR 1.875 billion) real estate fund.
The fund will buy income-generating buildings, primarily in Saudi Arabia, in sectors such as logistics, healthcare and education.
The fund has already made its first acquisition, the main distribution centre for Azizia Panda United Company, a leading supermarket company in Saudi Arabia. It was acquired for US $79.7 million and will be leased back to Azizia Panda for a period of 18 years.
“We believe that this fund is launching at a time that will allow us to deploy our financial resources to gather a portfolio of prime real estate assets at attractive valuations,” said Jorge Cantonnet, managing director and head of private equity at Al Rajhi Capital.
“Our partnership with Arcapita creates a powerful execution capability to leverage these investment opportunities, both in Saudi Arabia, and the rest of the GCC. Early responses from investors have been very positive.”
Al Rajhi and Arcapita plan to seed the fund, the ARC Real Estate Income Fund, with US $50 million and market it to institutional and high net worth investors in the GCC.
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