GFH Financial Group is expanding its US portfolio with the purchase of two multifamily residential sites in Las Vegas for US$200 million, as part of its North American investment strategy, underscoring the attractiveness of US real estate to Islamic investors. VINEETA TAN reports.
The Islamic financial group will be acquiring those assets in partnership with real estate specialist Carroll, which manages some US$5.2 billion in assets. The two properties comprise residential compounds Emerald Springs and the Meadows, located near Las Vegas suburban areas. The acquisition of 819 garden-style units brings the number of units being managed by Carroll to over 28,000.
“This sector has proven its resilience with a more than 90% rental collection rate during COVID-19 and has continued to witness significant investor interest. Around US$140 billion was invested in multifamily in 2020, with 0.6% year-on-year growth in multifamily rents and growth in average sales price of US single-family homes,” said Razi Al Merbati, CEO of GFH Capital Saudi Arabia.
Las Vegas is ranked the top city among the US’s high-growth secondary markets. It has the highest occupancy rates, at 96.5%, the second-highest population growth year-on-year at 2.2% and the second-highest annual rental growth at 3.7%.
With over US$12 billion of assets and asset funds under management, GFH is a familiar investor in the US real estate space. This year alone, it acquired a logistics and industrial asset in Ohio for about US$100 million in June and in the following month, spent a similar amount to purchase a student housing portfolio which covered properties in the states of Arkansas, Florida and Tennessee. In February, it partnered with Silver Creek Commercial Development to acquire a mission-critical distribution facility in Chicago for over US$135 million.
About three months ago, through its wholly-owned subsidiary GFH Capital, the Islamic financial group exited its US industrial portfolios I and II acquired in 2016, delivering an approximately 40% return to investors over the holding period. The portfolios consist of 26 assets located across the Midwest region of the US.