Kuwait Finance House (KFH) announced the signing of an agreement with UDR, Inc. which is a leading U.S. real estate investment company. The joint venture will seek to acquire high income residential real estate in major cities in the United States with total investments of up to USD $450 million, where KFH’s participation is 70% and UDR’s participation is 30%, which is an indicator that KFH can build fruitful qualitative investments in various fields and markets that offer best returns for shareholders and investors, assist in executing the global expansion policy, build strategic alliances with major companies, and use the accumulated experiences of the employees to achieve best performance rates.
KFH Chief Executive Officer – Mohammad Sulaiman Al-Omar noted in a press release after signing the agreement in London Friday with Tom Toomey, UDR’s President and Chief Executive Officer, that this venture is a continuation of KFH group strategy that focuses on the real economy and KFH is optimistic that it will add value to all parties involved including KFH partners, clients, and shareholders especially since KFH is targeting an area of the market it is familiar with. He further added that KFH is keen on working with experienced partners such as UDR with the current focus being on income producing assets. The venture will target class “A” assets with a minimum value of USD $20 million that are less than 7 years old. The venture intends to be fully invested over a two year investment period.
Moreover, Al-Omar expressed cautious optimism, since KFH is back as a major player in the American real estate market, which is considered to be a continuation in the footsteps of a portfolio that began in the 1990’s called Dana real estate portfolio, and was later followed by 5 real estate portfolios. He noted that the American economy has a strong effect on the global economy, which prompted KFH to be keen on working with a pioneering company such as UDR that works in the field of multifamily properties and possesses huge investments in selling, acquiring and real estate development in most American states and cities.
Furthermore, Tom Toomey, UDR's President and CEO stated that establishing a venture with a high quality partner like KFH will allow UDR to continue to grow its portfolio. UDR is looking forward to investing with its new partner during these opportunistic times, since KFH is a leader in the Islamic banking sector that has been growing around the world; thus the mutual cooperation is considered to be an opportunity that will benefit both parties. Toomey added that the company owns 50,000 apartment homes distributed all over the United States, in addition to thousands of houses that are being renovated, not to mention the experience required to have safe and rewarding investments for the company and its partners, which separates the company locally and globally from its competitors.
KFH’s AGM - Investment Sector, Abdulnasser Abdulmuhsen Al-Subeih said that KFH seeks to focus on prime investment opportunities and is keen on diversifying its investments. In this project, KFH is targeting an internal return rate "IRR" of 12% to 14% annually, in addition to studying investment opportunities and projects.
The International Real Estate Department Manager at KFH Ali Al-Ghannam noted that such a huge partnership with UDR in this field shows the objectives KFH is trying to achieve by returning as a major player in the American real