Opportunistic Assets Platform
Arzan Wealth will occasionally arrange and advise on opportunistic deals that offer the potential for significant capital appreciation, for those clients who prioritize capital growth over safety and a regular income stream. Despite the larger risk appetite of such clients, Arzan Wealth will always endeavor to deliver a superior risk-adjusted return, through careful market selection, careful strategy design and diligent ongoing advice.
The first strategy that was pursued in this opportunistic platform focuses on the creation of value from the
residential markets of major global cities with high barriers to entry, specifically New York City and Central London. The strategy avoids full construction risk, thus focusing on other aspects of the value chain in order to deliver attractive returns but without full development risk.
Arzan Wealth has arranged and advised on the following opportunities within the above-mentioned strategy:
Sep 2013 – joint venture with Global Design Strategies, a NY-based developer, to create
a residential-centric real estate platform, focused on refurbishment or condo conversion within
New York City, to supply modern, upscale condos for sale to a NY market that is constantly short of supply. Despite the avoidance of construction risk, the target return is a highly attractive net IRR of around 20%.
- The total size of the platform, by Gross Development Value (GDV), is targeted at around
USD375mn in the next three years. Given stringent risk management protocols and asset selection criteria, the first asset was only secured in Sep 2014. The asset, which is on Mercer Street in downtown Manhattan, will be able to provide 10 luxurious condo units to the market.
Jun 2014 – acquisition of
prime site adjacent to Canary Wharf in London, in joint venture with RER London Ltd, a London-based development advisor. The strategy involves land planning enhancement to allow for the creation of a major
residential project to offer middle-income and affordable housing. No construction risk is expected to be taken, but the value created is projected to create a very high IRR relative to the risks taken.