Dubai's GEMS sells school campus to US money manager

PineBridge Investments says it has signed sale-leaseback on unnamed campus; says ops will be unaffected
(Photo for illustrative purposes only)
By Andy Sambidge
Wed 06 Nov 2013 03:04 PM

PineBridge Investments, a New York-based money manager, has acquired a campus operated by Dubai-based schools operator GEMS Education, it said on Wednesday.

Under the terms of the sale-leaseback agreement, GEMS Education will lease a school campus for a term of over 20 years, PineBridge said in a statement, without disclosing the value of the transaction or the name of the specific property.

It added that there will be no change to the school's operations, and faculty, management and support staff will remain the same with "no disruption to pupils or their studies".

The deal comes as GEMS Education is reportedly seeking to raise about $500 million from a debut sale of hybrid Islamic bonds to finance its expansion plans.

The company, which employs about 11,000 staff and operates around 100 private schools across the Gulf region, has hired Morgan Stanley Inc, Credit Suisse and Abu Dhabi Islamic Bank (ADIB) to arrange the sale, it was reported last month.

"We see significant regional demand for proprietary real estate and private equity investments. Our platform allows us to provide one source of capital to fund our partners' growth, as well as unlock value in their real estate holdings." said Wael Aburida, chief investment officer at PineBridge Investments Middle East."

Nick Guest, chief financial officer at GEMS Education, added: "This is a continuation of our strategy for growth as the world's leading provider of quality private sector education.

"We continue to invest in high quality new schools; however, a natural solution to allow further growth is to partner with property funds and investors such as PineBridge Investments Middle East who recognize the importance and stable nature of the education sector within the UAE."

PineBridge, which manages over $69 billion in assets, appointed Talal al-Zain, the former chief executive of Bahraini sovereign wealth fund Mumtalakat, to head its Middle East and North Africa business last year and set up its regional headquarters in Manama.

The Gulf's education market is estimated to be about $40 billion in size with the private education sector accounting for about 14 percent, Saudi Arabian investment firm Itqan Capital said last month.

In September, it was reported that GEMS Education boss Sunny Varkey is selling up to 33 percent of the company in a bid to raise $500m.

GEMS currently operates close to 100 schools in 19 countries, serving 147,000 students from 151 countries.

The company charges up to $40,000 a year in school fees.

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