Gulf Capital JV in Talks to Sell Abu Dhabi Mall to Mubadala

Burj Khalifa tower, UAE
The Burj Khalifa tower, center, stands among city skyscrapers and the Address Sky View, right, under construction by developers Emaar Properties PJSC, in Dubai, United Arab Emirates, on Wednesday, April 11, 2018. Transformed into a flamboyant city state from an impoverished Gulf port in less than 50 years, Dubai defied geology to build skyscrapers and elaborately shaped islands in the sea. Photographer: Christopher Pike/Bloomberg

(Bloomberg) — Abu Dhabi-based private equity firm Gulf Capital PJSC is in talks to sell a mall to Mubadala Investment Co. and is raising a loan to boost liquidity.

Gulf Related, a joint venture between Gulf Capital’s real estate unit and U.S. developer Related Cos., is close to selling the Galleria Mall on Abu Dhabi’s Al Maryah Island to the sovereign wealth fund after operating the development for five years, Karim El Solh, Gulf Capital chief executive officer and Gulf Related’s co-managing partner, said in an interview.

“We are going to close very soon on that,” Mubadala executive director of real estate and infrastructure, Ali Eid Almheiri, said in the same interview, without revealing the size of the deal. “It just became obvious that we are the matching buyer.”

Gulf Capital will also consider selling Al Maryah Central mall once it’s open and “stabilized,” El Solh said. The mall is due to open in August after more than a year’s delay.

Retail Slump

Owners of Abu Dhabi retail space are trying to navigate a market slump after the drop in oil prices triggered a cut in government spending and slowed economic growth, according to consultant Cavendish Maxwell. Some landlords are offering rent-free periods, flexible leasing terms and rebates to retain tenants, the company said in January.

The Middle East’s private equity industry is also struggling after the collapse of Abraaj Group last year. The Dubai-based firm — which had managed $14 billion at its peak — faced allegations that it misused client money, sending shock waves through the ranks of local dealmakers.

Separately, Gulf Capital is close to signing a four-year loan that will “boost the company’s liquidity and will fully-finance all of our future investment needs,” El Solh said, without giving more details. The company has an 850 million-dirham ($231 million) loan maturing in February 2021, according to data compiled by Bloomberg.

The firm also “hopes to announce several new investments and exits over the coming two quarters,” he said.

Gulf Capital recently lost some senior executives, including Walid Cherif and Fidaa Hadad, co-heads of the private debt unit. The firm hired Sharaf F. Sharaf as managing director for the private debt business earlier this month.

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