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Mon 5 Oct 2009 09:25 PM

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Dubai's Rasmala eyes $133m Saudi property fund

Islamic fund set to tap mid-income housing developments around Riyadh.

Dubai-based investment bank Rasmala Investments is setting up a 500 million riyal ($133.3 million) Islamic property fund to tap opportunities in mid-income housing in Saudi Arabia.The kingdom has set aside about $100 billion to boost infrastructure over the next five years and is looking to cater to growing demand for new housing from the relatively young population in the world's largest oil exporter.

"We identified high-growth potential," Tamer Bazzari told Reuters. "We signed a (memorandum of understanding) with a Saudi-based property developer."

Bazzari said the fund would be launched by year-end and would focus on prime locations in the capital Riyadh.

Rasmala is also managing a 500 million dirham ($136.1 million) fund for property firm Deyaar and Dubai Islamic Bank, which owns a 42 percent stake in the developer, to buy distressed debt, including its own, as it looks to boost returns for shareholders.

Real estate prices in Dubai have slumped since the global financial crisis brought to an end a regional economic boom late last year.

Bazzari said he hoped to complete fund raising by the end of this quarter with first investments planned next year. (Reuters)

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