International Investment Bank (IIB), a globally focused investment bank based in Bahrain, today announced the launch of a new commercial real estate investment that offers investors attractive returns over a relatively short investment holding period.
IIB has taken a 65% stake in the proposed state-of-the-art West Bay Tower, which will be developed in partnership with SNASCO, a GCC based real estate company, and will form part of the Business Bay District in Dubai, UAE.
The 30-storey West Bay Tower, which will be built at a total development cost of approximately US$87.84 million, offers investors the opportunity for an early realization of their investment, which could potentially be achieved through pre-sales of office units during the construction period of the Tower.
This is IIB’s second investment in Dubai’s Business Bay development, which is being planned by the Dubai Government as the new dynamic ‘downtown’ area of Dubai, 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, being developed in partnership with Dubai-based Al Masa Group. This investment was successfully placed with IIB’s investors, and all of the office floors in that tower were pre-sold within three months from launching date of project.
“The commercial real estate sector in the UAE offers an attractive growth potential driven by the spectacular growth in other sectors,” said Mr. Aabed Al Zeera, Chief Executive Officer of IIB.
“Prime commercial office space in Dubai is currently at 107% occupancy levels, confirming that Dubai currently has a supply shortage of office space. Given this environment and IIB’s selective approach towards real estate, we are confident about delivering a profitable exit for our investors in West Bay Tower.”
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.
“IIB continues to explore and source high quality Shari’ah-compliant investment opportunities across diverse asset classes, industry sectors and territories with the aim of delivering real value for our clients. Investments in real estate in a variety of countries and sectors meet our clients’ demands for a diversified investment strategy, which is primarily focused on acquiring tangible assets,” said IIB’s Chief Operating Officer, Mr. Salah Nooruddin..
“IIB undertakes a thorough due diligence on each investment prior to taking a decision. We have put the project under various stress tests and benefited from the input of reputable external advisors to assess the viability of the project. Our direct involvement in real estate in the region and Europe helped us in benchmarking this project and making sure that we are offering an attractive product. Moreover, we are in final stages of putting together a team of prime consultants and contractors to make sure that the execution is done on schedule an to the expectation of our future buyers”, further commented Mohamed Hadi Mejai, Director of Investment and Business Development.
IIB successfully arranged and placed seven investments since its inception in 2003. Last month, IIB announced plans, subject to regulatory and shareholder approvals, to increase its paid up capital later this year from the current US$43 million.
The Bank’s 2005 net profit of US$7 million was a nine-fold increase over the previous year. Operating income also grew substantially, rising by 192% to US$12.4 million in 2005.
About International Investment Bank
International Investment Bank B.S.C. (IIB) was incorporated in Bahrain in October 2003 as an Islamic investment bank, with an authorised capital of US$200 million and a paid up capital of US$43 million. The Bank’s shareholders are high net worth individuals, business houses and institutions from the GCC states.
