GFH eyes US property deals

MANAMA: GFH Financial Group is eyeing multi-family real estate, student housing and logistics in the United States as part of its deal pipeline.

The Bahrain-based Islamic investment bank’s chief financial officer Suryanarayanan Hariharan revealed in a filing to Bahrain Bourse that it is working on more transactions in the property sector, as well as logistics and healthcare, having started the year “with a very promising pipeline of opportunities,” and converting them into transactions that were “welcomed by our investors across the region.”

“Currently, we are more looking at real estate in the United States, multi-family, student housing. These are the transactions that we’re looking at. Logistics is another domain that we’re looking at. In terms of private equity, we’re looking at healthcare. So, that’s the mix of transactions and deal pipelines that we’re looking at,” he told shareholders during a webcast on Q1-2021 financials.

GFH reported a net profit of $16.1 million for the first three months of 2021, more than three-fold the $5.08m recorded in the same period last year.

The bank also saw its assets grow by 10.8pc to $7 billion over the same period.

“Trust in the group translated into another period of profitability, especially in light of the continuing effects of the pandemic still being felt around the world,” Mr Hariharan explained.

In a statement last month when GFH reported its Q1 financials, GFH chief executive Hisham Alrayes said: “In the first quarter, profitability was driven by the placement of unique and diverse deals including the nearly $135m acquisition of a mission-critical distribution facility in Chicago, leased to Michelin North America, as well as the sale of GFH’s US-based portfolio of pre-IPO, high-growth companies that specialise in next generation technologies. Results were also supported by the sale of equity investments and treasury income realised from sukuks, notes and fixed income.”

GFH took a strategic decision a couple of years to evolve the treasury business, which the official said has paid off, with about 40pc of the income for the group in the period coming from the treasury performance.

“There’s a very proactive asset liability management function within the bank, which takes care, and that is reflected in the treasury portfolio’s performance for 2021,” he said.

Last December, the bank acquired a majority stake in Roebuck Asset Management, a specialised logistics and real estate asset manager in the UK for an undisclosed sum.

It was announced then that GFH and Roebuck were together working on over $1.21bn of new third party mandates.

This April Roebuck announced it sold a UK-based prime logistics park for $123m, netting a post-tax IRR of 20pc plus.

In response to a question, Mr Hariharan said GFH continues to look at opportunities similar to Roebuck in the US and Europe.

“Specifically, we still haven’t reached anywhere near to it, but hopefully we’re targeting something for 2021.”

Stating that while the company typically does not give guidance on performance, the CFO said: “a very strong pipeline of deals that is happening currently. We also expect each of our business lines to positively contribute to our bottom line.”




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