Manrre Real-Estate Fund says it is benefitting from the launch of e-commerce services and apps in the UAE
The Manrre Real-Estate Fund says its first year results have benefitted from the increase of e-commerce in the UAE.
Managed by Dalma Capital, Manrre said in a statement that it has experienced a strong yield and capital appreciation on its 215 million AED portfolio, which it describes as “a stark contrast to market sentiment and the performance Dubai’s other real-estate funds”.
“The fund launched in 2018 amidst doubt and skepticism about the market, but has generated a total annualized return of 12.5%, including an 11.9% coupon paid to shareholders and a 0.6% increase in NAV per share – significantly outperforming the benchmark which has lost 27% over the same period,” it said in the statement.
“The apparent bottoming and turnaround of logistics and industrial real-estate is an optimistic sign for Dubai real-estate and could be a leading indicator that market conditions are improving broadly. Concerns about oversupply of residential developments has led investors to remain cautious about how their real-estate portfolio is allocated. Unfortunately for most investors, the logistics and industrial real-estate market is difficult to access, requires specialised expertise and has high barriers to entry – a problem which Manrre was established to help address.”
The fund focuses on the logistics and industrial sector, an area which is of high interest for investment, it says.
“Our outlook for the Manrre fund called on the wise words of Warren Buffett – ‘be greedy when others are fearful, and fearful when others are greedy’,” said Manohar Lahori, director, Manrre. “This principle will allow us to outperform in the long-term and take advantage of market cycles.
According to the 30-year veteran of Dubai real-estate investment, the logistics and industrial real-estate sectors are benefiting from the regional e-commerce boom underpinned by the launch of Noon and Amazon.ae.
“As we have seen in other markets, when retail spending behavior shifts to online shopping, real-estate demand shifts from retail centers to warehouses,” explains Zachary Cefaratti, CEO of Dalma Capital “The 21st century mall is an Amazon fulfillment center.”
Other trends in the burgeoning tech sector are also creating opportunities for industrial real-estate, said Manrre, “such as the proliferation of datacenters and mass-adoption of apps such as Deliveroo – a tenant of the Manrre Fund”.
“Deliveroo’s delivery-only super-kitchens bring new, exciting restaurant brands to different areas” said Yousef Al-Barqawi, Head of Deliveroo Editions “Our Editions Kitchens provide restaurants with the infrastructure to set up their brands efficiently.”
Continued growing demand from Manrre’s tenants for warehouses, logistics facilities and centralised kitchens on the back of the ecommerce and tech boom has helped contribute to the outperformance of the fund.
Manrre’s investment thesis and performance has won the support of investment industry veterans who understand this intersection of real-estate and tech.
Investment industry veteran Noor Sweid, founder of Global Ventures said he been delighted to join as an independent member of the Manrre investment committee.
“The fund thesis supports our outlook for the shifting landscape in the tech and e-commerce sectors,” he added.
“Cash is king in the market today” says Kunal Lahori, director, Manrre. “We have turned the current state of the market to our advantage as corporates seek to free up capital through sale and leaseback or distressed sales.”
The focus of the Manrre fund remains in logistics and industrial assets, but the fund acquires assets opportunistically in other segments of the commercial real-estate market with a focus on creditworthy, stable tenants.
“Robust tenant due diligence is of heightened importance in a challenging economic environment” commented Shiv Kumar, a member of Manrre’s advisory board.