In an effort to ameliorate accommodations for migrant workers in Gulf Cooperation Council (GCC) states, a multinational company with Canadian roots is starting a fund to do just that.
Heirloom Investment Management is launching Baytna to acquire labour accommodations in the GCC with a focus on mitigating the isolation migrant workers feel from familial separation and not speaking native tongues—not to mention cultural chasms that often exist—and enhancing communal ties.
According to Beth Hirshfeld, vice president of marketing and corporate development at Heirloom Investment Management, there are an estimated 14.5 million migrant workers in the GCC and, despite existing regulations to augment their standards of living, countries like the United Arab Emirates endeavour to go a few steps further. She added that the Baytna—which means “our home” in Arabic—fund will purchase labour accommodations in UAE, Oman and Saudi Arabia to implement superior living standards.
The Baytna fund is composed of investment monies, with minimums of $1m, and projects net annualized IRRs of 15-17% total returns, including annual dividend payments of 8-9% beginning approximately a year after capital draws.
“Heirloom Investment Management will start by acquiring and enhancing labour accommodations in the UAE – both in Dubai and Abu Dhabi – and will expand into Saudia Arabia and Oman over time,” said Hirshfeld. “The initial projects in the UAE are a lower-risk, mid-return, mid-impact strategy deployed primarily in the earlier stages of the Fund’s lifecycle.
“The Fund’s capital will be deployed to acquire labour accommodations, make modest improvements focused on adding privacy, security, and health and entertainment facilities, and to add resource efficiency projects,” continued Hirshfeld. “This will enhance the lives of the migrant workers living in the accommodations while also reducing the environmental footprint.
Labour accommodation in the GCC have traditionally yielded strong returns for owners, with capitalization rates that go toe-to-toe with other residential and commercial real estate projects. Hirshfeld says investing in upgrades for accommodations’ infrastructure and utility efficiencies will help the Baytna fund save on water and energy use, which has the potential to become exorbitant in hotter climates. Among the enhancements are solar panels, low-flow toilets and motion sensor light switches.
In pursuing the Baytna fund, Heirloom Investment Management’s ultimate aspiration is to set the standard demanded by employers of their worker accommodation providers, says Hirshfeld.
“The fund’s impact goal is to improve the lives of 15,000 to 20,000 migrant workers directly and five to 10 times that indirectly by enhancing their happiness, health, education, capacity, and ultimately their productivity,” said Hirshfeld. “It also aims to make a meaningful positive contribution environmentally by enhancing resource efficiency and serving as a platform to pioneer new environmental processes and technologies.
“On a broader scale, the Fund aims to demonstrate to companies that there is a measurable economic benefit in prioritizing the care and welfare of their employees. Happier, healthier workers are more productive and suffer fewer lost-time injuries, have lower churn rates, while offering greater productivity and loyalty to employers.”
Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
