By George Prior
The Palmon Group lead property fund – Manrre, has acquired AED 220m of Dubai commercial assets paying 8% annual dividends and open to smaller investors
“Be greedy when others are fearful and fearful when others are greedy.” Wise words from legendary investor Warren Buffet, giving inspiration to Dalma Capital CEO Zachary Cefaratti in a contrarian strategy to back a Dubai commercial property fund and “buy the dip”.
“Dalma Capital’s pedigree in hedge fund management leads us to often make contrarian investments. In cyclical asset classes like property, contrarian strategies are part of the playbook of astute investors including Ray Dalio and Warren Buffet.”
“Manrre investment opens an opportunity usually only available to large, institutional investors and UHNWs”
Property speculators might see reason to doubt the Dubai market. Many believe that a decade of high-speed development has left the gulf city with an oversupply of property, particularly at the high end of the market. And the Dirham’s peg to the Dollar and possible rising interest rates have some spooked.
But concerns for speculators aren’t concerns for longer-term investors, Cefaratti makes clear.
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“These concerns are well known in the market – and are already reflected in substantial price decreases in recent years. Manrre views this as an opportunity to ‘buy the dip’, taking advantage of depressed asset prices.”
It’s a message confirmed by emerging markets investment guru Mark Mobius. Speaking at the Financial Times’ Global Financial Forum, Mobius – a three-decade veteran of Franklin Templeton – reiterated that there was no need for concern about Dubai oversupply.
“In any growth situation, you’re going to get ups and downs.” He said. “The important thing to remember is that in these cycles the peaks get higher and higher, because you’re building a larger and larger base.”
The Manrre fund is currently AED220m, with a view to grow to AED550m
Manrre REIT (Real Estate Investment Trust) is now actively targeting Dubai logistics and industrial property in robust sub-markets such as Jafza, National Industrial Park, Dubai South, Dubai Investment Park, strengthening their position as a logistics and industrial REIT.
Crucially, Manrre opens opportunity to investors often squeezed out of such top tier strategies. Speaking on behalf of the family-owned Palmon Group, Kunal Lahori, Executive Director, emphasised the opportunity.
“Our family has been investing in Dubai commercial Property for over 30 years, we’ve seen many cycles. Dubai remains a world-class, safe-haven investment destination. Indeed, the investment landscape is becoming ever-more secure. Its real estate routinely outperforms that in other global destinations and stable, income generating assets can provide a hedge against volatility in equity markets.”
Manrre REIT’s core investment objectives include generating a regular source of income for investors, with quarterly dividends targeting an 8% annualized return.
The collaboration between Dalma Capital, a renowned hedge fund manager in the Dubai International Financial Centre, and Palmon Group, one of the longest-standing conglomerates in Jafza, presents an unprecedented opportunity for smaller investors to own income-generating industrial assets across UAE.
Manohar Lahori, Chairman at Palmon Group concludes: “Savvy investors understand that the current market conditions are right to acquire assets and to prepare for when it inevitably picks up. It is a time-honoured and successful strategy.”
About Dalma Capital
Dalma Capital is a global alternative investment fund accelerator and platform focused on alpha generating strategies with an inherent edge in emerging investment strategies and markets. Dalma’s edge also extends to investment banking opportunities in innovative products including disruptive technologies, blockchain investments and Sukuk. Established in 2011 and headquartered in the Dubai International Finance Centre, Dalma Capital’s goal is to identify the next generation of alpha generating ‘edge’ fund managers, strategies and opportunities.
About Palmon Group
Palmon Group was born over 40 years ago when Manohar Lahori established his first business venture, a garment factory under the name of Palmon Exports in Mumbai, India. A decade later, in 1985 Palmon moved its operations to Dubai after a chance meeting with late Sheikh Rashid Bin Saeed Al Maktoum and so Palmon became one of the first companies to establish in UAE’s first free zone – Jafza.
Palmon Group made its name by shipping apparel to high-demand retailers in the US and Europe, including the likes of Walmart, Marks & Spencer and Gap. As a result of Manohar Lahori’s vision, dedication and hard work, by 1992 the Palmon Group had increased its apparel production multifold to meet worldwide demand and operated 19 factories. In the 90s, the firm had 4,000 employees with sales offices in London, Manchester and New York.
From its core business of clothes manufacturing, the Palmon Group branched out into a series of other sectors, including logistics, warehousing, facilities management and real estate. The group has extensive investments in property both in the UAE and overseas. In late 2018, Palmon Group formed Manrre REIT, a DIFC based property fund.
