(MENAFN - Arab Times) Kuwait Financial Centre "Markaz" (KSE: Markaz, Reuters: MARKZ.KW, Bloomberg: MARKAZ: KK) announced obtaining final approval from Kuwait Investment Authority (KIA) to manage part of its National Real Estate Portfolio which invests in Kuwait's real estate market.
Markaz said that it signed a contract with KIA to establish and manage a portfolio of real estate investments with a maximum value of KD 250 million for the period of 10 years, representing 28.6% of Markaz AUM as of September 30, 2012. Fees impact on profits could not be estimated as they are decided based on the actual amount invested and the portfolio's actual returns which will be paid quarterly in the coming years.
Markaz real estate portfolio management activities includes value-added services and aims to achieve rewarding returns by increasing economic and operational efficiency of commercial and investment real estates. Markaz also manages investments for individuals, companies and public institutions and has an extensive experience in establishing and managing portfolios.
Bassam Al-Othman, Markaz Executive Vice President - MENA Real Estate said: " We'd like to thank KIA for their trust in Markaz, which has been one of Kuwait's investment companies that has developed an advanced corporate governance structure and keenly applied it in light of the country's regulatory requirements in addition to international best practices.
Markaz has a strong governance framework through which risk levels were identified and controlled by setting internal guidelines and sound administrative systems. Markaz has continuously been improving and strengthening its governance framework in line with international best practices and therefore received a "CG-A2" Corporate Governance rating from Capital Standards Agency."
Al-Othman added: "KIA's decision to grant this contract to Markaz has come as a laudable step within the government's effort towards revival and sustainability of the State of Kuwait's economic pillars. We hope that such a step would reflect positively not only for the real estate sector but for all other economic sectors."
Al-Othman noted that "Markaz manages real estate assets by establishing and managing real estate funds and portfolios; buying and managing revenue generating real estate; investing in properties with potential value improvement; and developing real estate across various sectors. Our team is experienced in project development and closely manages development operations by monitoring its progress, quality and cost through financial and technical reviews in addition to progress reports, field visits and workshops. Markaz also conducts extensive studies on supply and demand in local real estate market."
Markaz has been managing real estate by pinpointing proper rent prices, increasing occupancy and raising tenants' retention rate in addition to lowering operational costs. Markaz team conduct periodical field visits to evaluate needs and opportunities to create added value, issuing periodical reports to monitor real estates' performance. Since 2005, Markaz has carried several real estate activities in the MENA region with the objective of investing for the company and its client in the region's markets.
"Markaz Real Estate Opportunities Fund" manages investments in Lebanon, Saudi Arabia, Jordan, Syria and Abu Dhabi. The fund recently exited its investment in Jordan and will distribute the investment profits during Q4 of this year. It has also been completing a real estate development project in Lebanon. Markaz has also been developing residential villas in Al Khobar, Saudi Arabia, aiming to achieve 20% in net profit.
The company also acquired a plot in Al Khobar, Rawabi neighborhood and hired a design consultant with the aim to develop it into a residential apartment complex for rental targeting expatriates living in KSA. The development aims to generate gross returns in the tune of 20%.
Markaz real estate activities also include several projects in the State of Kuwait. "Markaz Real Estate Fund" was established in 2003 and aims to achieve profits on a monthly basis by investing its capital in buying and developing real estate in Kuwait. The fund received additional subscriptions totaling KD 5.02 million in Q3 2012 and deployed KD 10.25 million raising its portfolio to 38 properties. The funds NAV exceeded KD 80 million and its annual returns since inception reached 9.5% including steady monthly distributions.