International Investment Bank (IIB), a globally-focused investment bank based in Bahrain, announced that it has achieved a profitable early exit for its investors from the US$94.1 million One @ Business Bay commercial tower project in Dubai, following the sale of their 50% equity stake to their joint-venture partners in the project, Omniyat Developments, part of the Al Masa Group of Dubai.
At a press conference held in Dubai, IIB’s Chief Executive Officer, Mr. Aabed Al Zeera, commented: “We are delighted that we have been able to achieve an excellent Internal Rate of Return (IRR) of 25 % p.a. on this investment, together with an exit from this project only 11 months after the original investment was made. Following the sale of all 30 floors in the tower within the first few months, our partners made an attractive offer for our equity stake, and we took the decision to exit so that we could provide our investors with an attractive early return on their investment, and redeploy our resources towards other investment opportunities. We had originally envisaged an investment holding period of 18 months, but following a very effective marketing campaign, pre-sales of the floors exceeded our original projections and generated significant surplus cash flow. The combination of IIB’s financial, structuring and placement capabilities with Omniyat’s marketing and development expertise proved to be an extremely successful formula, which we will seek to replicate on future projects with other partners.”
The commercial property market in Dubai has been strong over the past two years, with demand for prime office space outstripping supply. Under a Dubai Government master development plan, Business Bay is destined to become the new central business district in Dubai, eventually comprising some 250-300 towers for commercial, retail, residential and hotel use.
IIB’s Chief Operating Officer, Mr. Salah Nooruddin, observed: “This successful outcome is a win-win situation for all parties involved, and it underlines the value of IIB’s strategic approach to investing. At the time of our investment in this project, I commented that we had selected the right investment product, in the right location, with the right business partner at the right time, and this has now been confirmed by tangible results. We currently have a healthy pipeline of new transactions under consideration in a variety of sectors and markets internationally, and we are confident that we will be able to continue delivering attractive risk-adjusted returns for our investors.”
IIB will explore further investment opportunities in real estate, but we will continue to be highly selective, targeting market segments and countries where there are still good growth prospects. We are also currently conducting due diligence on a variety of investments in the financial, healthcare, power and leisure sectors in the MENA region, Asia and Europe, so we are very confident about IIB's prospects for 2007 and beyond.
© 2007 Al Bawaba (www.albawaba.com)
