Unicorn KSA Real Estate Fund I (KSA I) was established to capitalize on the opportunities presented by the rapid rate of population growth and continued high level of urbanization in the Kingdom of Saudi Arabia, coupled with the shortage of high-quality large-scale residential real estate developments catering to middle income families in the Kingdom.The principal objective of the Fund was to achieve medium-term capital appreciation and dividend payouts.
Closed in July 2005, the US$52.5 million fund invested in the Ishbeliyah Project, a residential real estate development comprising 324 villas constructed over a total land area of 144,030 square metres in a northern suburb of Riyadh. The development is located in a rapidly expanding residential district catering primarily to the middle income professional segment of the population. The project’s developer, Dar Al Arkan Real Estate Development Company, is one of the largest residential real estate developers in Saudi Arabia.
Although investments in the Saudi real estate sector are restricted to Saudi nationals, the innovative structure of KSA I provided an opportunity for non-Saudi nationals to invest, making it the first fund to allow non-Saudis to participate in the rapid growth of the Saudi Arabia residential real estate sector.
In March 2006, KSA I received payment from the sale of a portion of its investment and distributed 41% of the capital along with the profits to investors. In March 2007, the Fund distributed the remainder of the capital and profits, providing investors with a final Internal Rate of Return (IRR) of 15.5% per annum vs. the original anticipated IRR of 10% per annum.
