Palmon Group launches private REIT as it looks to raise $90mn
Manrre property fund aims to acquire rent-yielding commercial assets
The family behind the Palmon Group, a UAE-based conglomerate, has announced the launch of its private real estate investment trust (REIT), Manrre, a property fund and REIT for qualified investors, it has been announced.
In a statement, the company said that the fund has been established in compliance with the laws and rules of the Dubai Financial Services Authority (DFSA). Manrre aims to raise $90 million as part of its strategy to acquire additional rent-yielding commercial assets, it added. The fund will follow a stable, low-risk strategy that involves focusing on industrial, logistics and commercial assets, with its primary target market being the UAE.
Manrre’s core investment objectives include generating a regular source of income for investors by way of distributing quarterly dividends and targeting an 8% annualised return, it said in the statement.
The challenge for investors is the inability to access high-value real estate which will generate better returns as it typically requires a larger ticket size, it added. By pooling resources with those of others, qualified investors are able to access these larger assets that might otherwise remain out of reach, with a minimum subscription starting at $500,000, the statement explained.
Manrre also accepts investments in-kind of those assets which fit into the fund’s investment strategy, and which will be accepted into the fund, in exchange for shares. This will allow in-kind investors to enjoy added diversification and returns without the operational obligations of property management and maintenance.
“Our vision for Manrre is to list the fund on stock exchange within the next two years to generate maximum return for our investors. As we get closer to 2020, we believe this is the right time to launch Manrre,” said Manohar Lahori, chairman of Palmon Group.
Manrre currently holds a portfolio of 19 real estate properties worth $58.5 million across the UAE and its portfolio consists of 62% investment in logistics assets, 23% in industrial assets, 8% in office assets and 7%t in staff accommodation.
“Since establishing our roots in 1985 in the UAE, and over the last 33 years we’ve been an investor in industrial and commercial real estate. We leverage the global, regional knowledge and expertise of the team, which today underpins Manrre. With structured, formal governance and an external investment committee validating every investment, Manrre achieves the ideal balance between personal insight and objective scrutiny and controls,” added Lahori.
Globally, REITs are a growing segment of the real estate market with an estimated market capitalisation of around US$2.1 trillion, according to Cohen & Steers. Asia is the region with the largest growth in REITs in recent years with Singapore and Japan being the biggest markets.
