UCIG’s involvement in real estate extends through its subsidiary, TAG.
This company boasts a seasoned team of developers equipped with extensive knowledge of the property landscape in the Middle East and Africa. TAG specializes in projects spanning the commercial and residential sectors. Currently, it is actively progressing towards the launch of a 50-storey residential tower in Maritime City, situated in the heart of Dubai, with an anticipated completion date set for 2027.
Common types of PERE investments include office buildings, residential properties (multi-family buildings), industrial properties, retail properties, commercial centers, etc. Approximately 36% of all these investments are in office spaces. Some other niche investments include student housing, hotels, medical offices/centers, manufacturing land, among others. With the rise in the e-commerce sector, retail investments have shown significant growth. Large institutions like pension funds, non-profit funds, asset management funds, private investors and HNI’s are parties that invest in PERE. Despite the attached risks and limitations, this type of startup investments can generate high levels of income with strong returns (6% to 10% average).
Private equity is a process of gathering a pool of funds from a host of investors to amass large amounts of money which are used to purchase stakes in companies. In contrast to Venture Capital fund, which also essentially means the same, PE is associated with mature organizations, in need of some capital infusion for activities like expansion, revitalization, etc. It may involve full buy-outs of companies, sometimes it involves partly buying a portion of the stakes. Other strategies of PE include buying out the owner, cashing out current investors, expansion capital infusion, recapitalization, etc. In recent times, favorable market scenarios and institutional push towards increasing real estate exposure have led to positive growth in the private equity real estate (PERE) sector. The last decade has seen more than USD 100bn raised in the market for PERE deals. But how does it work? PERE is an asset class of pooled funds from various sources of property investments. Post the 1990’s devaluation in property rates, PERE became a popular strategy for acquiring properties across sectors. However, it has its ups and downs: it requires significant capital upfront and is often risky, but, the returns are high.
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