Dubai Bank has Europe in its sights

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EuroProperty has recently published an article on Rasmala Real Estate business and its growing track record. Naseer Aka, Head of Real Estate at Rasmala was quoted in the article. 

Rasmala’s head of real estate Naseer Aka (pictured right) is keen to tell more European principals, brokers and lenders about the Dubai based bank’s real estate business and growing track record. Three years since joining the investment
management division to add real estate to the mix for clients, Aka is targeting debut offices and logistics investments in the
Netherlands, Belgium, France and Ireland, as well as more deals in the UK and Germany after deploying not far off $500
mln (€410 mln) of capital in the latter two countries and in Dubai. The real estate division invests for a range of Gulf Cooperation Council clients in the Middle East, but is expanding, and hopes to add an Asian client to the roster. No matter
what the geography, the clients are broadly coming to Rasmala for the same types of assets, as Aka explains: ‘Our money is
looking for long income assets let to bluechip covenants where the tenants have a commitment to the location.’
Aka hopes that the c$400 mln (€328 mln) of European transactions closed so far means Rasmala is starting to build up a
track record as a solid counter-party, and so more vendors will now consider coming to him early. He relates how, a few months ago, he switched his plans on the spot during a visit to Germany to pursue an appetising deal. He received a phone call about the forthcoming sale of warehouses prelet to Amazon near Dortmund by a private German developer/investor. ‘I
jumped in the car and told them I’d be there to see the site within a couple of hours’, he smiles.

Rasmala ended up buying that investment (see panel) but he agrees that in this market it pays to keep a cool head.
‘I’ve been in real estate for 15 years and today it is more competitive than I have ever seen with quite aggressive pricing. We’re competing with pension funds and longterm family office money too. ‘It is an attractive market to sell into, so
we have to be careful about the prices we pay – it is quite easy to get excited.’
The target cash-on-cash yield on investments is around 7%. ‘Typically, the calculation we make is looking at the pricing
that the covenant’s public debt trades at and then applying a discount for property’s illiquidity, a discount in the order of 225-300 basis points,’ he says. Assets are bought for one client at a time and those clients in turn may syndicate to retail investors as the Kuwaiti investor in Amazon’s Scottish distribution centre did (see panel). The Dortmund deal was secured for Gulf Islamic Investments and represented GII’s first German assets. Just now, Rasmala has bids out on a logistics portfolio in Germany, on a national office portfolio in the UK and there are a couple of logistics and office assets in the
pipeline in the Netherlands. ‘The Dutch market is slightly discounted compared to other European destinations, although it is beginning to catch up – there are some fantastic tenants there,’ says Aka.
‘We would love to do something in France, but the way the leases are structured makes it difficult and we haven’t been able to secure anything at fair value yet. We’d consider Italy or Spain if the covenant quality was good.’
As a dollar-denominated investor Rasmala is not ignoring the US either. Aka reveals they are in talks with a US asset
manager to work together in future, which he promises to reveal soon.