Qinvest and GCC
Investor Launch “Magnolia Fund” To Invest In UU Multifamily
Residential Market With Acquisition of Income-Generating Asset
In Colorado
May 10, 2017
QInvest, announced today
its collaboration with a GCC institutional investor to create
and launch the Magnolia Real Estate Fund, LLC (“the Fund” or
“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, and comprises of 287 units. The asset is projected to
yield net cash in excess of 8% on annual basis and a net IRR in
the range of 12-13%.
The launch of this Fund
further realizes QInvest’s investment strategy in the
multifamily real estate space and offers its investors an
income-generating investment platform to access the sector. It
follows from the announcement earlier this year that QInvest had
made its first investment in the sector with the acquisition of
a residential development in Charlotte, North Carolina, US.
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. Thornton boasts
favorable demographics and significant growth over the past 20
years, combined with muted levels of new supply in the
submarket. 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:“The newly
acquired asset in Thornton, Denver presents an attractive
opportunity to invest in a well-located asset at a discount to
replacement cost in one of the most fundamentally sound rental
markets in the US. 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”.
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