Fahad Al Mukhaizim:
• We, along with our partners, successfully exited a property in Manchester resulting in an attractive IRR of 16.2% and a return multiple of 1.46x for our investors.
• The exit is proof of investors' confidence in NIC and its capabilities in consistently delivering successful outcomes.
• The property was acquired in 2019 for GBP 44.5 million and leased to retail giant Tesco.
• The company initially distributed quarterly dividends to investors at 9%, which was later increased to 10% in 2021, despite the challenges due to the COVID-19 pandemic.
• We had engaged in negotiations with the American Commercial Real Estate Investment Fund since the beginning of Q3 2021 in relation to the exit of our investment.
• We are pleased to achieve an attractive return on our investment prior to the anticipated exit date.
• The UK investment climate is highly competitive and requires a specialized team with strong expertise and know-how.
• COVID-19 resulted in substantial challenges for investors in the UK real estate investment sector
In 2021, National Investments Company (NIC), in partnership with Altum Capital successfully exited its UK real estate investment in the Manchester area for a total amount of GBP 50 million. The property was sold to the Commercial Real Estate Investment Fund in the USA, marking a strong start by NIC for the year 2022. In a press release, the two companies explained that the Manchester area property was acquired in 2019 for GBP 44.5 million. The property was fully leased to the retail giant Tesco. It pointed out that the exit process reflects the investors' confidence in NIC and Altum Capital's to source attractive opportunities and manage and execute them succesfully.
Mr. Fahad Al-Mukhaizim, CEO of the National Investments Company, said: "We are pleased to conclude the exit from the Manchester area property at the beginning of 2022. It is a great achievement that reinforces our position as one of the major players in the international real estate market, as the investment achieved an IRR of 16.2% and a return multiple on investment of 1.46x. He stressed that the investment has achieved the strategic objectives of realizing attractive cash returns to investors through the acquisition of properties rented by creditworthy investors, with the property achieving stable profits accompanied by an increase in its value.
Al-Mukhaizim added that the NIC maintained, particularly since the acquisition of the property, a quarterly distribution of 9% to investment shareholders. He pointed out the company's success during 2021 in increasing the annual return of the property to 10%, despite the economic challenges of the COVID-19 pandemic. He explained that the higher return was due to a combination of annual rent enhancement, and excess reserves, which confirms our initial underwriting assumptions and conservative approach towards managing the investment. Al-Mukhaizim praised the efforts of the IBS Sector and the strategic partner that have been negotiations since the beginning of Q3 2021 with the Commercial Real Estate Investment Fund to sell the property. Despite the unusual circumstances the world is going through, NIC has succeeded in building strong relationships with leading partners in the global market, and in successfully managing billion-dollar transactions. This gives it a competitive advantage when it comes to managing more transactions in the future.
Commenting on the exit deal, Mr. Khaled Waleed Al-Buaijan, CO-Founder of the UK Altum Capital Partners, said: " We are proud of the result of our partnership with the NIC in our first joint project, where we reaped the fruits of the hard work of the two teams prior to the acquisition of the property, by developing a tight strategy and a proactive approach to generate returns, preserve and grow the invested capital, as well as the sound management of the property after acquisition, and the smooth exiting process in a short time, with returns exceeding the set plan, despite the challenges of the pandemic".
Al-Buaijan added that the UK market is very competitive due to the substantial capitals and the attractive economic and legal environments for the local and international investors, which provide few good opportunities. The investor must develop a solid strategy and work with a professional technical team fully familiar with the market in order to achieve the desired results. He added, "The pandemic posed great challenges to the UK real estate investment sector and its performance. Therefore, we are pleased with the success of this investment in light of the current economic environment in the UK." In conclusion, Al-Mukhaizim praised the NIC's promising path, which is in line with its strategic plan and future vision as one of the leading investment companies in Kuwait and the region, in terms of fiduciary AUM currently amounting to KD 1.13 billion and the management of M&A transactions, in addition to running several diverse investment services.