Demographics and an increasingly expanding middle class are fueling demand for real estate in growth markets. These markets also house the most rapidly urbanizing cities in the world, with one million people moving to cities every week.
Other macro trends that have considerable impact on the occupational demand for real estate in growth markets include the structural shift in trade patterns, with south-to-south trade volumes increasing considerably.
In our markets, real estate has traditionally not been developed and invested into at the pace required to match the underlying economic progress. This is especially relevant to residential, office, retail and logistics real estate.
Due to the variations within growth markets, Abraaj maintains an opportunistic approach to real estate investing. In most of our markets however, there is a clear lack of high-quality real estate, built according to the increasingly specific demands of both domestic and international tenants. Therefore we see an attractive proposition within development and repositioning strategies across sectors. Such strategies rely heavily on the capital appreciation of the underlying asset, unlocked through rigorous implementation of best-in-class real estate practices and requiring close on-the-ground monitoring, effectively managed through the real estate team’s collaboration with the Abraaj local offices.
On the other end of the spectrum are lower risk income focused strategies, where the rental income of the underlying properties constitutes a higher proportion of the projected returns. More specifically, these strategies are pursued to enable access to a high level of diversification across growth markets and a regular income distribution to our investors.
Our real estate business is pursuing strategies across the risk spectrum and in doing so, is able to offer a holistic real estate alternative for investors. The real estate team work closely with local teams and have a proven ability to source, execute and asset manage investments in a wide variety of real estate sub-sectors.
The team benefits from Abraaj’s extensive local presence and network which enables an institutional, yet entrepreneurial and hands-on approach to real estate private equity investing. Our partnership capital approach goes beyond traditional private equity of simply acting as a means of financial capitalization.
Abraaj has invested in real estate and real estate related sectors for over a decade and across continents. Strategies have varied according to the market opportunities in the geographies we have been active in and has included both development and income-led strategies in sub-sectors such as retail, offices and student accommodation.