Abu Dhabi Investment House launch of $400m Shariah-compliant India Entertainment City fund

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ADIH has announced the launch of its India Entertainment City fund, a $400m Shariah-compliant fund that will finance India Entertainment City, planned to be developed in India's newly announced economic zone in Navi Mumbai. The fund, which has an investment period of two and a half years, is expected to achieve a 75% return on investment (ROI) over the period of the investment. The new project is built on ADIH's innovative Entertainment City concept, which is currently being implemented in Qatar. The concept consists of a mixed-use development comprising residential and retail components and focusing on the family entertainment industry - a concept that is unique to the countries in which it is being executed. India's selection as an international venue for the Entertainment City stems from the country's massive economic growth potential, as well as its specific growth opportunities in the real estate and entertainment industries. Spearheaded by the Indian government's macroeconomic and structural reforms aimed at promoting long term economic stability and growth, India boasts liberalized export policies, licensing of technology and has also implemented tax reforms to provide investment incentives. Driven by positive growth in the economy, real estate in India is booming. With a population exceeding 1 billion people, it presents the world's biggest middle class consumer market of 300 million people, resulting in the inherent attraction of major multinational companies. Developments in the real estate sector as a whole are being driven by demand for more housing units in cities and towns because of growing urbanization of Indian population, burgeoning middle class, increased disposable income, easy availability of housing finance at cheaper rates and tax incentives. To further enable and facilitate this growth, the Indian Government has introduced significant liberalization in the real estate sector. As per the country's foreign direct investment (FDI) policy, 100% FDI is permitted under the automatic route in townships, housing, built-up infrastructure and construction-development projects (this includes, inter alia, city and regional infrastructure, commercial premises, hotels, resorts, recreational facilities, etc). As one of the main industries for which India is renown, the entertainment sector presents boundless opportunities for rewarding investments. With a captive audience, India Entertainment City (IEC) will provide a home for actors and supporting industry professionals, along with world class leisure facilities and entertainment activities for all audiences. Moreover, the chosen location for IEC, the rapidly developing commercial and industrial hub of Navi Mumbai, which is located on the outskirts of Mumbai City, will ensure that IEC becomes the heart of the entertainment industry. The sites are strategically located at the confluence of several arterial roads and in close proximity to several large infrastructure projects. The area has access to well-developed rail linkages as well as one of India's largest and most modern seaports - Jawaharlal Nehru Port Trust. The area is also located in close proximity to other large industrial areas, providing access to several feeder industries. Further, its location on the Pune-Mumbai-Thane knowledge corridor provides the site with instant access to skilled manpower in the region. Mumbai, which is the capital city of India's economic powerhouse Maharashtra, is the financial and commercial capital of the country. During the last decade, Maharashtra as a whole received investment of around %33bn with UK, Italy, France, Germany and Mauritius being the major investors in the state. Infrastructure, auto components, engineering, chemicals, rubber, petroleum and software are the sectors in which FDI is concentrated. Maharashtra has the highest rate of implementation of investment projects at 48%, and is the first Indian state to formulate a specific policy for the development of Special Economic Zones (SEZ). Built upon such a combination of factors, IEC presents an unprecedented investment opportunity for investors who are looking to diversify their portfolio by industry and region in line with Sharia guidelines. ADIH has already made considerable progress on IEC, appointing CB Richard Ellis who are finalizing the development strategy that is based on a master plan prepared by RTKL. International specialists Halcrow have already started designing the overall infrastructure requirements for the project. The IEC Fund will be placed through the ADIH Placement team and underwriters, who are marketing the fund throughout the Gulf. The Placement team is available in each of the UAE, Qatar, Oman, KSA, Bahrain, Kuwait and throughout the region. The fund is also being marketed to international investors, based on high levels of indicated interest. The placement team's track record positions it as a success-driven team, as evidenced by over-achievement of projected returns on previous transactions, including the successful exit of the Lagoon fund with an ROI of 30%, and the successful partial exit of Al Arabi Fund. The Porta Reef fund, which closed recently, also witnessed very high demand and oversubscription. The Entertainment City Advisory Board has also been announced where the first meeting was held last February. The Board is comprised of an internattional mix of global entertainment industry leaders to advise on and help implement successful strategies for Entertainment Cities' designs, plans and future operations. Areas that the Advisory Board will be consulting on include: entertainment family centre and theme park operations, entertainment and sports events, performances and exhibitions, entertainment design and master planning, international entertainment and educational museums, entertainment and sports news and entertainment brands and sponsorship. Advisory Board members include the following members: Juha Tiihonen - Chairman and CEO, Starcut USA, Inc.; Joel Katz - Greenberg Traurig ; Charlie Besser - President and CEO, Intersports, ; Charles ; Mark Shapiro - President and CEO, Six Flags; Norm Chirite - Managing Director, RedZone Capital; Terry Stewart - President and CEO, Rock and Roll Hall of Fame; Bea Perez - Vice President, Coca Cola; Bruce Eskowitz - President and CEO - Premier Exhibitions; Charles Goldstuck - President and COO, Sony BMG and Randy Philips - President and CEO, AEG Live. Rashad Y Janahi, Managing Director and Board Member, ADIH, said, 'India Entertainment City will be one of ADIH's largest undertakings on a global scale. Having done extensive feasibility research and concept positioning, we are highly confident that IEC will be a one-of-a-kind project that provides a unique investment opportunity for our clients. 'As the creator of the Entertainment City concept, ADIH will build on the experience from Qatar Entertainment City to leverage India's vast potential for investments in the entertainment industry.' ADIH is currently studying an evaluating exporting the 'Entertainment City' concept to China and North Africa. ADIH recently announced the successful exit of the Lagoon Fund with a total ROI of 30%, as well as a partial exit from Al Arabi fund with a total ROI of 27.5%.

 

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