International Investment Bank (IIB), a globally focused investment bank based in Bahrain, has announced that its latest commercial real estate investment offering in Dubai’s Business Bay district has been heavily oversubscribed.
A broad range of investors from across the GCC region have subscribed to the investment offering for a 65% stake in the proposed state-of-the-art West Bay Tower, which IIB will develop in partnership with SNASCO, a GCC-based real estate company.
Several leading firms have been appointed to execute the project, including Cansult Limited, a Canadian engineering and project management services company; Projacs International, a pan-Arab project management firm; and Better Homes, one of UAE’s foremost real estate companies, which will be responsible for the sale of office units and leasing of retail space in West Bay Tower.
The 27-storey, uniquely designed, X-shaped Tower will have a total development cost of approximately US$87.84 million. West Bay Tower will not only be situated at the entrance to the Business Bay area, but it will also have a prime location overlooking Shaikh Zayed Road. Ground-breaking for the project is expected to take place before the year-end.
“We are delighted with the response to the West Bay Tower investment offering, which has been highly successful. We have seen strong demand from both institutional and private investors from across the GCC region, and we are gratified to be able to continue to bring exciting new opportunities to the market,” said Mr. Aabed Al Zeera, Chief Executive Officer of IIB.
“The West Bay Tower project also represents yet another example of IIB’s commitment to partnering for success, and we believe the team of industry leaders assembled on this project makes this a truly compelling opportunity. Each of them is a leader in the area of real estate development and management and we are confident that their expertise and market knowledge will support our efforts to deliver superior returns to our investors and shareholders alike.”
The projected Internal Rate of Return (IRR) on the West Bay Tower project is 21.6% per annum over an investment horizon of 36 months; and the project represents IIB’s second investment in Dubai’s Business Bay development.
Business Bay has been planned by the Dubai Government as the new dynamic ‘downtown’ area of Dubai – which already holds rank as the pre-eminent business hub in the UAE and the region. In November 2005, IIB acquired a 50% equity stake in a US$94.1 million high-end office tower, One@Business Bay, which is being developed in partnership with the Dubai-based Al Masa Group.
“Commercial real estate in the UAE and in Dubai in particular offers an attractive growth opportunity and we are pleased to announce the second successful subscription of an investment made by the Bank in Business Bay. Growth in this segment of the real estate market has been strong and we expect this upward trend to continue. Driven by expansion across nearly every business sector, demand for high quality commercial space continues to increase at a rapid rate. Currently, Dubai is at 107% occupancy levels for commercial office space, confirming that projects such as West Bay Tower are both in demand and well positioned for success,” said Mr. Salah Nooruddin, Chief Operating Officer of IIB.
