The First Investor invests in Brazil’s World Trade Centre
THE First Investor (TFI), the investment banking division of Barwa Bank Group, on Monday said it has invested in the iconic World Trade Centre complex in Sao Paulo, Brazil, but did not give any financial details of the investment.
The investment was done by TFI-Hines Brazil Income Real Estate Fund, which was launched in March earlier this year. It is the first shariah compliant closed-end income generating fund in Brazil. Barwa Bank is also a cornerstone investor in the fund, together with US based Hines International Real Estate Holdings.
Located in Sao Paulo, the World Trade Centre complex provides services that include office, retail, and hospitality components along with the largest convention center in South America.
“Considering the unique nature of the asset, TFI believes that the acquisition will greatly enhance the fund’s profile. The fund already boasts a strong pipeline of attractive investment opportunities,” a joint statement by TFI and Barwa Bank said.
The TFI-Hines Brazil Income Real Estate Fund has a target size of $500 million and is expected to achieve a net leveraged Internal Rate Of Return (IRR) of 10.5 percent to 12.5 percent for investors.
Furthermore, it targets to distribute an average annualised yield of 8 percent (quarterly distribution) on the invested capital over the life of the fund.
Barwa Bank Group Vice- Chairman Mohammed al Saad said, “The World Trade Centre complex, Sao Paulo, is an extremely diversified and highquality revenue stream which has huge upside potential due to the synergies amongst the different business components of the complex. The asset will provide an attractive, long term income stream to investors.” He said, “The fund has been structured to maximise returns to investors. This represents the second collaboration between TFI and Hines.” Hines has its office in São Paulo since 1998. Since then, Hines has developed or acquired over 17 million square feet of property in cities of Brazil with an additional six million square feet in design or under construction.
David McGinnis, chief Investment Officer for the fund commented said, “The fund will focus on high-quality assets in premium locations with limited competitive supply.
The fund will seek assets with high-quality tenant credit to ensure stable and predictable cash flows and promising expectation for capital appreciation.”