Guidance Investments focuses on Gulf and Asia investors for real estate fund

The US-based investment firm Guidance Investments is targeting Gulf and Asia investors for its second round of fundraising for its US$400 million South East Asia logistics real estate fund which it launched this year, a company executive said.

The fund, which raised $100m in its first round, is planning to hold another $150m round next year, and a third round in 2017, said Amer Hammour, the chairman of Capital Guidance real estate business, a unit of Guidance Investments, in Dubai last week. The fund’s investors in the first round included government-related institutions in South East Asia and the Arabian Gulf, as well as family offices from both regions.

“We will be targeting institutions mostly in the Gulf as well as some of the family offices and corporate offices but also a lot of investors in Asia,” said Mr Hammour. “Malaysia has some very important institutional investors, pension funds, government sovereign wealth funds and the like who are very active investors.”

In the third round, the company plans to attract investors from the US and Europe.

The fund, which invests in the logistics and industrial sectors, is focusing on Indonesia, Malaysia, Singapore and Thailand. Vietnam could potentially be another market, but needs to develop more, said Mr Hammour.

“We feel that this area is very exciting,” said Mr Hammour. “It is undergoing tremendous growth because of industrialisation. What is happening in particular is that a lot of the companies that had set up in the early 2000s in China because of lower labour rates and the activity in China are now building factories and developing in these countries, particularly in Thailand and Indonesia.”

On Sunday, the 10 leaders in the Association of South East Asian Nations established the Asean Economic Community, as part of a larger Asean Community that aims for political, security, cultural and social integration, with hopes of competing with China and India.

Guidance Investment’s fund, which has a total return of 13 to 14 per cent, will invest two thirds of the cash in warehousing and logistics in South East Asia.

“There has been a lot of growth in the middle-class income in this area,” said Mr Hammour. “This has supported the growth of logistics warehouses and more sophisticated logistics real estate. Also it had supported the growth of middle income-focused retail properties like hyper markets.”

The company would like to take the fund public and list it as a Real Estate Investment Trust (Reit) when it has a large portfolio, Mr Hammour said. The Reit could be listed in Malaysia or Singapore.

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