Abu Dhabi - Gulf Capital, one of the region’s leading alternative asset management firms, and Related Companies, the most prominent privately-owned US-based real estate firm, today announced the launch of a new regional real estate development venture that will focus primarily on high-end, mixed-use real estate destination developments in the Gulf. The new pan-GCC company, “Gulf Related”, will be based in Abu Dhabi and will identify and pursue marquee large-scale mixed-use real estate development opportunities, initially in Abu Dhabi and the Kingdom of Saudi Arabia, followed by a Middle East and Northern Africa (MENA) wide regional expansion at a later stage.
Gulf Related’s initial capitalization is AED 180 million ($50 million) and is expected to rise to over AED1 billion by 2012. Related cemented its relationship with the MENA region and increased its global prominence in 2007 when the company aligned with an elite consortium of international partners through a $1.4 billion equity and debt investment by Goldman Sachs, MSD Capital, Kuwait Investment Authority, The Olayan Group and Mubadala Development Company. Gulf Related’s senior management will be led by Kenneth A. Himmel, President and CEO of Related Urban, the mixed-use division of Related Companies.
Related Companies and Ken Himmel pioneered the concept of mixed-use urban development beginning in the 1970s with Himmel developing such destinations as Water Tower Place and 730 North Michigan in Chicago, Illinois, Copley Place in Boston, Massachusetts and Reston Town Center in Reston, Virginia, and Related developing such iconic developments as Time Warner Center in New York City and CityPlace in West Palm Beach, Florida.
The new joint venture will look at multi-phase master-planned mixed-use development opportunities in urban centers as well as larger-scale community developments organized around new town centers. These projects will capitalize on Related’s unparalleled track record in creating unique urban experiences that combine the energy and vitality of an urban destination with local lifestyle and culture. Residential projects will offer both affordable and luxury villas as well as high-rise buildings. Related has extensive expertise in mixed-use projects that seamlessly integrate indigenous architecture with exciting retail, restaurant, entertainment, hotel, office and residential uses.
Commenting on the new venture, Mr. Hareb Al Darmaki, Chairman of Gulf Capital, said: "The GCC enjoys a robust macro-economic outlook, significant liquidity and a young growing population. These, coupled with a positively turning inflection point in the real estate and construction markets, make the timing of launching a first-class regional real estate venture with world-class partners highly opportune. Gulf Capital’s Board decided to expand into this attractive real estate asset class by partnering with the most experienced and capable developer. We are fortunate to have found the ideal partner in Related Companies, which boasts an outstanding track record and is the best-in-class real estate firm in the United States.”
Mr. Stephen M. Ross, Chairman, Founder and CEO of Related Companies said: "Related Companies has always maintained an extremely disciplined approach to both the markets we operate in and the product types we deliver. We have been studying the Gulf market and exploring the opportunities it presents for the past few years and we are thrilled to have found a solid regional partner in Gulf Capital with whom we will jointly pursue strategic real estate development opportunities in the region. It is our firm belief that the GCC is one of the fastest growing and most promising regions in the world and we are confident that together we will identify and unlock select exemplary and sustainable development opportunities.”
Dr. Karim El Solh, CEO of Gulf Capital, added: “This is an important milestone in the evolution of Gulf Capital. As a leading regional alternative asset management firm, the natural progression for Gulf Capital was to expand into real estate, a new alternative asset class for us. Our entry into the regional real estate market is a timely one given the considerable drop in both land prices and construction costs as well as the surging demand in select areas of the GCC. Our new real estate activities will be highly complementary to our thriving private equity business”.
Mr. Kenneth A. Himmel, President and CEO of Related Urban added: “In addition to its equity investment contribution in the joint venture, Related brings not only unrivaled real estate development expertise and relationships with some of the most active and successful hotel, retail, and restaurant brands, but a dedication to creating hand-crafted destinations that resonate with local lifestyle and culture. We expect that the projects identified and launched by Gulf Related will be among the most preeminent and successful real estate destinations in the Gulf, with a collection of unique brands and tenants. Just as importantly, these projects will help guide the continued regional growth and economic development through smart growth and sustainable planning in select urban locations.”
Mr. Marvin Traub, President of Marvin Traub Associates and former Chairman and CEO of Bloomingdales and a retail business executive widely credited with transforming modern merchandising and marketing, will be advising Gulf Related on its retail investments and will maintain an ongoing strategic role with Gulf Related. Mr. Ross added: “Gulf Related will also leverage Related’s deep experience in affordable housing. As one the largest US developers of affordable housing, Related is in a unique position to capitalize on the huge pent-up demand for affordable housing in the Gulf.”
The Kingdom of Saudi Arabia currently has an acute housing shortage, with demand projected at 1.3 million residential units over the next seven years. The UAE capital has severely undersupplied residential and commercial stock, with the residential market expected to remain undersupplied until 2012.
Dr. Karim El Solh concluded: “While Gulf Capital continues to be focused on its growing Private Equity business, we are equally excited about the possibility of providing our shareholders and investors with additional exposure to the fast growing real estate asset class. Related has an exceptional track record in this arena and we believe Gulf Related, leveraging our combined strengths, is well-equipped to become the premier mixed-use real estate developer in the GCC.”
About Gulf Capital Gulf Capital is a leading alternative asset management firm focused primarily on investing in the GCC region. Incorporated in Abu Dhabi in 2006 as a Private Joint Stock Company, Gulf Capital was established with a capital base of AED 1.225 billion (USD 330 million) from 300 of the most prestigious institutional and private investors in the Gulf. Over the last three years, Gulf Capital has rapidly emerged as a leader in the field of private equity investing in the Middle East. Gulf Capital recently expanded its alternative asset management platform by entering into the real estate development arena in joint-venture with the Related Companies, the most prominent US real estate developer. Gulf Capital is today one of the largest alternative asset managers in the GCC. For more information about Gulf Capital please visit www.gulfcapital.com.
About Related Companies Heralded as one of the most prolific and visionary developers in the United States, Related Companies was formed over thirty-seven years ago. Today, Related is considered the most prominent privately owned real estate firms with divisions in development, finance, property management, marketing and sales. Headquartered in New York City, Related has offices and major developments in Boston, Chicago, Los Angeles, Las Vegas, San Francisco and South Florida and boasts a team of more than 2,000 professionals. Related has developed over $20 billion in real estate and owns real estate assets valued at over $15 billion made up of best-in-class mixed-use, residential, retail, office, trade show and affordable properties in premier high-barrier-to-entry markets. Related’s mixed use division, Related Urban, was established in 1997 by Stephen M. Ross and Kenneth A. Himmel with a commitment to develop, own and manage market-dominant mixed-use properties. Mr. Himmel and Related Companies pioneered the concept of mixed-use urban development beginning in the 1970s with Related developing such iconic developments as Time Warner Center in New York City and CityPlace in West Palm Beach, Florida and Himmel developing such destinations as Water Tower Place and 730 North Michigan in Chicago, Illinois, Copley Place in Boston, Massachusetts and Reston Town Center in Reston, Virginia.