Abu Dhabi’s Lunate and Brookfield to set up $1bn property joint venture

Abu Dhabi alternative investment manager Lunate is partnering with New York Stock Exchange-listed Brookfield Asset Management to set up a $1 billion joint venture to invest in the real estate sector across the Middle East amid a strong performance of the property sector.

The alliance will focus on developing build-to-sell and “opportunistic” buy-to-sell residential assets across the UAE, Saudi Arabia and other markets in the Middle East, the two companies said in a statement on Tuesday.

Lunate, which has more than $110 billion in assets under management, will commit a “significant cornerstone investment” to the joint venture.

It will also “leverage its regional network and capabilities to help drive the joint venture's commercialisation and fund-raising efforts”.

The announcement follows Lunate’s acquisition of a 49 per cent stake in Dubai's 53-storey ICD Brookfield Place building last year. Saudi conglomerate Olayan Financing Company was also part of the deal.

“The Middle East’s residential real estate sector presents a highly attractive investment opportunity, driven by the region’s strong economic outlook and growing status as a hub for global wealth and talent,” Khalifa Al Suwaidi, managing partner at Lunate, said.

There has been a boom in the property sector in some of the Middle East markets, including the UAE, on the back of government initiatives such as residency permits for retired and remote workers and strong economic growth, boosted by non-oil diversification and higher oil prices.

The influx of wealthy people to the Emirates is also supporting the property market. Last year, 7,200 millionaires arrived in the UAE, building on an influx of 4,700 in 2023 and 5,200 in 2022, property consultancy Knight Frank said, quoting data from Henley & Partners.

The total number of dollar millionaires in the UAE stood at 130,500 at the end of December, ranking the Emirates as the 14th-largest wealth market.

Prime residential values in Dubai and Abu Dhabi, key focus markets for the joint venture, have increased by 18 per cent and 11.1 per cent, respectively, in 2024, the companies said.

Saudi Arabia has also been recording higher property prices as economic growth continues, with apartment values in Riyadh climbing 75 per cent in the last four years, according to Knight Frank.

“Our joint venture with Lunate is significant as we expand into the high-quality residential real estate sector, driven by a rising population seeking premium properties,” Jad Ellawn, managing partner and regional head of Middle East at Brookfield, said.

Brookfield has a strong presence across many sectors in the region, with $15 billion in managed assets across private equity, real estate and infrastructure.

Global companies, including The Trump Organisation, are also expanding in the Gulf region. It has recently announced projects in the UAE, Saudi Arabia and Qatar in partnership with London-listed Dar Global.