Dubai Group takes 20% stake in Mazaya Saudi

Dubai: Dubai Group, the leading diversified financial services company of Dubai Holding, on Sunday announced it has become a founding shareholder in Mazaya Saudi for Commercial Investment Co. LLC (Mazaya Saudi) after subscribing to a 20 per cent stake.

The transaction was completed through its subsidiary Dubai Capital Group, which has invested approximately Dh500 million ($135 million) in the Saudi company's equity.

As a founding shareholder, Dubai Capital Group will play an important role in the development of the company and will be represented on its Board of Directors.

Soud Ba'alawy, executive chairman, Dubai Group, said: "As the leading diversified financial services company of Dubai Holding, Dubai Group attaches paramount importance to diversifying, not only geographically, but also into multiple and profitable business sectors.

"This transaction is in line with our long term strategic plans as we believe Mazaya Saudi is ideally positioned to become a leader in the booming Saudi real estate sector. We are also pleased to have forged an association with Al Mazaya Holding, one of the most dynamic and visionary institutions in the GCC's real estate landscape."

Mustafa Fareed Geninah, CEO of Dubai Capital Group, said: "This transaction demonstrates our confidence in the Saudi real estate sector where, it is estimated, that the long term demand for housing units is 1.3 million up until 2015. Further market statistics indicate that only 45 per cent of Saudi families own houses, which means that in the long run there are real growth opportunities in this important sector.

"This investment will also contribute to strengthening our regional private equity portfolio, which has achieved superior returns in sectors such as fertiliser production, cement, glass, aviation and real estate development. This deal is a further testament to the Group's remarkable performance, achieving an Internal Rate of Return of 106 per cent over the last five years."

Headquartered in Riyadh, Mazaya Saudi will invest in attractive opportunities in the kingdom's real estate sector, targeting the middle and high end market in the residential, commercial and office segments.

Mazaya Saudi will have a paid up capital of Dh2.45 billion ($667 million). It will be managed by Al Mazaya Holding KSCC, the prominent regional real estate developer headquartered in Kuwait, which has accomplished several prestigious projects across Dubai, Abu Dhabi, Bahrain, Qatar and Oman.