Knight Frank’s corporate finance team has set up a $200m (£137m) equity fund to invest in office property in Washington DC. Total geared investment for the fund could eventually approach $700m (£480m).
Knight Frank head of research Steve Mallen said the deal had come about through Knight Frank’s links with US real estate practice Grubb & Ellis.
The fund is being launched by private US developer Republic Properties Corporation. Knight Frank is working with Kleinwort Benson on the fund.
Mallen said: “Capital values in Washington have continued to rise while they have fallen in virtually all other US markets.
“Current projections suggest that returns will be superior to most if not all other US locations and most other international real estate sectors too.”
The fund is expected to meet a strong appetite from Middle Eastern investors, and has been particularly structured to allow both Islamic and non-Islamic investors to participate.
The fund will comply with the treatment of interest under Islamic law, which forbids the paying of interest on borrowed money.
Knight Frank Corporate Finance is working on similar vehicles that will target the European commercial market and the UK residential sector, Mallen said.
EGi News 10/05/02
