- 2,032-unit portfolio of multifamily communities located in North Carolina and Texas
- Investors’ internal rate of return exceeds forecast
- Portfolio sold for USD 182.5mn, exceeding original forecasts
Al Salam Bank, the pioneering Shari’a-compliant Bank in the Kingdom, today announced the successful sale of a portfolio of 7 multifamily assets in the US for a gross sale consideration of USD 182.5 million, exceeding the original underwriting.
The 2,032-unit portfolio, comprised of seven class B multifamily communities in North Carolina and Texas, was acquired in 2016 and underwent a range of upgrades to reposition the assets and enhance value. Despite an original anticipated investment horizon of 5 years aiming for a 2021 exit, the investment thesis was achieved, and exceeded, in a shorter investment period, leading to an early exit. Both North Carolina and Texas enjoyed a buoyant 2019, supported by growth in job creation and positive economic outlook.
This resulted in an uplift in rents and reduction in vacancy rates, which contributed positively to the value of multifamily real estate assets. Al Salam Bank Head of Private Banking, Ali Habib Qassim commented: “Our successful exit from the investment, ahead of schedule and exceeding original underwriting, underscores our ability to offer bespoke asset management opportunities to our clients and deliver attractive risk-adjusted returns.”
Ali Habib Qassim further added: “The US real estate market showed steady appreciation over the investment period, with some pockets seeing spurts of accelerated growth. The exit comes at an opportune time, ahead of the uncertainty of the current COVID-19 pandemic. With the current volatile environment bringing new attractive opportunities which are being assessed on an opportunistic basis, the decision to exit early has enabled our investors to increase the cash allocation in their respective portfolios in anticipation of tactical deployment over the coming period.”
The successful entry and exit demonstrates the Bank’s asset management capabilities, which span various asset classes, globally. Al Salam Bank continues to asses and source tailored asset management opportunities for its customer base with the aim of maximizing risk-adjusted returns. For more information, please contact our customer care center on 17005500.
