GFH Partners Complete $450 Million Investments in US Real Estate Sector

Bahrain-based GFH Partners Ltd, a subsidiary of GFH Financial Group, has announced that it has concluded investments totalling $450 million in the US real estate sector between the fourth quarter of 2023 and the first quarter of 2024.

In a disclosure to the Dubai Financial Market (DFM) on Tuesday, the company said that the investments were built on GFH Partners’ thematic investing into the fundamentally strong medical clinics and student housing segments of the US real estate market, each benefiting from proven rental growth, low national vacancy, and market stability.

In the Medical Clinics sector, GFH Partners has acquired a portfolio of assets worth 150 million. This portfolio was carefully chosen on an asset-by-asset basis targeting markets within states exhibiting favourable long-term demographic trends, low tax environments, and growing inward migration in line with the firm’s SWAN (Sleep Well at Night) investing philosophy.

The portfolio is anchored by large and investment-grade healthcare systems such as Memorial Hermann and Baylor Scot & White, which are among the largest healthcare systems in the state of Texas. With fixed annual rental escalations, a weighted average lease term exceeding eight years, and occupancy of 98%, the Portfolio offers atractive risk-adjusted returns.

This portfolio has increased GFH Partners’ medical clinics’ exposure to more than 35 properties under management exceeding $800 million in value. The Portfolio is predominantly managed by GFH Partners’ subsidiary, Big Sky Medical, a Dallas, Texas-based Medical Clinics asset manager with a proven track record in the sector.

Student Housing                                                    

Similarly, GFH Partners also acquired a lucrative portfolio in Student Housing. Student Housing Portfolio III, which has a value of approximately $300 million, encompasses high quality assets that include three brand-new, income-generating properties strategically situated near top-tier public universities in strong-performing markets. The Portfolio includes 1,300 beds and currently boasts an impressive 97% occupancy rate and is well-positioned for continued growth.

GFH Partners has already secured co-investments in the Portfolio from leading and globally renowned institutional players and will be predominantly managed by GFH Partners’ subsidiary, Student Quarters, an Atlanta, Georgia-based student housing asset manager with over 15,000 beds in its portfolio.

The acquisition also follows on from the firm’s highly successful recent exit from its Student Housing Portfolio I which delivered a remarkable 122% return for investors within just two years.

GFH Partners CEO Nael Mustafa said that in acquiring our third series of portfolios within the Medical Clinics and Student Housing sectors, we reiterate our commitment to strategic sectors that have strong fundamentals underpinned by demographical tailwinds, demand/supply imbalances, and attractive entry levels.

“With these acquisitions, GFH Partners along with our subsidiaries, Student Quarters and Big Sky, continues to position itself as a gateway to unique real estate opportunities originated and managed holistically by the GFH Group,” Mustafa added.

GFH Partners is focused on expanding the Group’s global asset management capabilities in the real estate sector globally and currently manages more than $6 billion of real estate assets as part of the total $18 billion of assets managed by the Group.

It is regulated by the Dubai Financial Services Authority (DFSA), and its investments and offerings are further regulated by respective domiciles, including regional regulators such as the Central Bank of Bahrain (CBB) and the Saudi Capital Market Authority (CMA), as well as respective global regulators of the investment vehicles, ensuring best practices in line with global investment standards.