UAE’s IBC group plans to acquire 10,000 holiday homes in Dubai in $5bn deal

The properties to be acquired will be financed via a $1 trillion Sharia-compliant bond



UAE-based investment company IBC Group intends to acquire 10,000 holiday homes in Dubai in a deal valued at $5bn (Dhs18bn), it announced on Wednesday.

The company has contracted Berkshire Hathaway HomeServices Gulf Properties on an exclusive basis to play an advisory brokerage role to assist in identifying, acquiring and financing the properties.

The properties to be acquired will be financed via a $1 trillion Sharia-compliant bond or sukuk, IBC said.

The deal includes the possibility of scaling up to acquiring one million properties in over 100 cities across the globe, the statement added.

Operating in the UAE since 2014, the IBC group has focused on private equity investment in real estate, arts and future technologies.

The group is backed by Khurram Shroff, co-founder of The Gallery Suites Vacation Rentals, a short-term rental management firm that focuses on providing services to property investors, homeowners, and Airbnb hosts.

The new properties being acquired in Dubai will cater to the growing Muslim traveller market.

“For the Muslim traveler, providing Sharia-compliant vacation homes with standardised Qibla direction and prayer mats in each of our apartments will enhance our offerings in this sector,” said Shroff.

IBC said it sees “strong opportunities for growth” in the short-term accommodation market in Dubai, especially in light of the approaching Expo 2020 event.

The largest-ever event of its kind in the MEASA region, Dubai Expo 2020 expects 25 million visits during the six-month period.

“The short term prospects of the venture are particularly promising, in the light of Expo 2020. However, with the regulatory framework governing the Dubai business ecosystem becoming increasingly more lucrative for investors and corporations, the possibilities for medium and long-term growth also hold significant promise,” the statement said.

According to a recent report by Knight Frank, Dubai’s holiday home market accounts for 2 per cent of the emirate’s total households, the highest proportion of all other key global hub cities.

Of the 10,766 active listings in 2018, 61 per cent were entire homes or apartments, 31 per cent were private rooms and the remaining 8 per cent were shared rooms, the report found.