Gulf Capital, an investment firm in Abu Dhabi, said today it has partnered with Related Companies, the developer of the $1.7bn Time Warner Center in New York City, to build up to five projects in Abu Dhabi and Riyadh over the next five years.

Karim el Solh, Gulf Capital's chief executive, expects the projects to cost between Dh2bn to Dh5bn, half of which will be corraled from investors and half of which will come in the form of bank loans. Following initial investments in Abu Dhabi and Riyadh, Mr el Solh said the venture, called Gulf Related, may expand to other cities and countries in the GCC.

It's an interesting and somewhat surprising move for Gulf Capital. The venture marks the first foray into property for the firm, which heretofore had concentrated on private equity deals in the region - earlier this month, it raised Dh1.75bn in commitments for a new private equity fund.

The announcement also comes at what might seem a strange time, when property values across the region are sagging and a lack of cash available for lending at the banks is making getting the loans Gulf Related plans to rely on to finance its projects hard to come by. But Mr el Solh said he expected conditions to improve during the year or so it's going to take for the firm to study the market and partner with developers in Abu Dhabi and Riyadh. And he said a severe shortage of housing in both Abu Dhabi and Riyadh should make the projects viable despite the downturn in prices.

Another lingering question: how Gulf Related will get the land on which to build these huge  developments, which are to include retail, commercial and residential space. The plan, according to Gulf Capital, is to ink agreements with developers that have large land banks that haven't yet been earmarked for development. In Abu Dhabi, that would probably mean going after plots owned by Aldar, Sorouh or Mubadala, all of which own extensive unused tracts of land. This is definitely one to watch.

(Pictured above: Karim el Solh, chief executive of Gulf Capital; photo supplied)

That's a decent chunk of money - in fact, it seems to be the most raised (or at least the most that's been announced, mind you) in the Gulf this year, a relatively dry period for PE in the GCC and across the globe.

I talked yesterday with Karim El Solh, the chief executive of Gulf Capital, and Muhannad Qubbaj, the managing director of business development, at a press briefing in Abu Dhabi, where the firm is based. They're searching out all kinds of opportunities now, concentrating on established businesses in regional markets that are primed to grow (Saudi Arabia being the prime example). They're not looking for distressed assets, although they say there are some distressed sellers out there. Rather, they're going for controlling stakes in entrenched businesses, which they approach individually to make deals (they usually don't participate in auctions). Mr Qubbaj said one prime target was spinoffs from the large family conglomerates that constitute a large share of the region's commercial prowess.