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Venture Capital Bank (VCBank), an Islamic wholesale bank licensed by the Central Bank of Bahrain, announced today its successful exit from a real estate portfolio in the US multifamily residential sector. With a gross sale value of USD 116.5 million, this exit generated a return on investment (ROI) of 54 per cent; and provided investors with an internal rate of return (IRR) of 11 per cent over the five-year holding period.
The investment comprises of multifamily residential assets Westhaven in Atlanta, Georgia, USA. VCBank and its investors jointly acquired a 90 per cent stake in this portfolio in 2016. The acquisition was conducted in cooperation with a specialist US operator, who has extensive experience and expertise in the management and operations of multifamily residential assets.
Commenting on this exit, Mr. Asad Aftab, Project Manager of US Multifamily Investments at VCBank, said: ‘These investments have performed exceptionally well during the initial period, providing investors with quarterly dividends pre-Covid and substantial exit proceeds equating to 20 per cent of the investment value. The property rent collection was severely impacted during 2020 due to Covid, but with constant monitoring and tight oversight, VCBank kept on looking for potential buyers to exit at an opportunistic price. Following the acquisition, the properties underwent a comprehensive value-creation programme, which involved renovating its apartment units, expanding recreational amenities, and enhancing the properties curb appeal.”
WestHaven at Vinings is a 610-unit garden and townhome-style apartment community in Atlanta, Georgia. Built in 1984-1989 and renovated in 2012-2015, the property is located within the exceptional Smyrna submarket, approximately 12 miles northwest of Downtown Atlanta.
The Property’s setting is excellent to support long-term value, both in terms of its location within the metro area and its highly attractive site. The Property benefits from direct access to the Cumberland / Galleria commercial district, which contains 17 million SF of office space and 3 million SF of retail space.
VCBank’s growing track record of successful exits of investments in the US multifamily residential sector includes Bridgewater and Preston Creek in Atlanta in 2019 and now WestHaven at Vinings in Atlanta during 2021.
According to Mr. Robert Wages, CEO of VCBank: ‘Our successful value-accretive transactions to date in the US multifamily sector – comprising four properties acquisitions and three exits – underline the considerable knowledge and expertise that the Bank has developed in this space since 2015. They illustrate the excellent returns provided to shareholders and investors resulting from our strategic focus on attractive yielding real estate opportunities in the USA.
‘We are positive about the future outlook for the US real estate sector due to its strong market fundamentals, together with its demonstrable resilience to economic recessions. The Bank is currently identifying further investment opportunities in major metropolitan areas that display robust economic growth and attractive potential for investments. Additionally, we are also reviewing similar potential investment opportunities in Europe,’ he concluded.