In a deal worth $5 billion (Dh18 billion), UAE-based IBC Group announced plans to acquire 10,000 prime properties to furnish and manage as holiday homes in Dubai. The investment company has contracted Berkshire Hathaway HomeServices Gulf Properties (BHHS) on an exclusive basis to assist in identifying, acquiring and financing the properties.
Leveraging the expertise of BHHS, IBC Group said the move aims to build confidence in the region’s real estate industry. The company also said it intends to acquire up to 1 million properties in over 100 cities worldwide.
The group is backed by Khurram Shroff, co-founder of The Gallery Suites Vacation Rentals, a worldwide short-term rental management firm that specialises on services to property investors, homeowners and Airbnb hosts.
Focus on Muslim travellers
While the S&P Global Ratings forecast a growth in the real estate and hospitality sectors by 2020, especially for short-term accommodation in light of the approaching Expo 2020 event, the alliance also seeks to cater to the growing number of Muslim travellers in the country. The Global Muslim Travel Index has featured the UAE as one of the most favoured Muslim travel destinations, according to IBC Group, adding that “the alliance intends to address this segment of the market ably”.
“We believe in interfaith harmony and cater to all beliefs,” said Shroff. “For the Muslim traveller, providing Sharia-compliant vacation homes with standardised Qibla direction and prayer mats in each of our apartments will enhance our offerings in this sector.”
The properties will be financed via a $1 trillion sukuk, a Sharia-compliant bond.
IBC Group, which has been operating in the UAE since 2014 focusing on private equity investment in real estate, arts and future technologies, said short-term prospects of the venture are promising because of the upcoming Expo 2020, which expects to attract around 25 million visits from travellers around the world. “However, with the regulatory framework governing the Dubai business ecosystem becoming increasingly more lucrative for investors and corporations, the possibilities for medium and long-term growth also hold significant promise,” the company said in a statement.
By Staff Report