GUST Real Estate Investment Class Welcomes Guest Speaker from BIG Holding
GUST Real Estate Investment class, led by Dr. Abdulla Al-Falah, welcomed Engineer Abdulrahman AlKhannah, GUST alum and Group CEO of Beyout Investment Group Holding (BIG Holding). The event was organized in collaboration with the Gulf Financial Center (GFC).
Dr. AlFalah said: “The purpose for inviting experts from the market with real life example is very important for students to understand real estate from investment perspectives. The concept of BOT, which our guest speaker explained today is one of the attractive real estate investment approaches which has a great potential in Kuwait. In addition, as students are required to develop their real estate projects for this course, now they have good understanding about the concept of BOT and can consider it as their investment approach for their projects.”
The seminar, entitled, “BOT Models: Buying vs. BOT”, educated students about the Build-Operate-Transfer (BOT) system, a form of project financing wherein a private entity is assigned a concession from the private or public sector to finance, design, construct, and operate; as stated in the concession contract.
During the seminar, Eng. AlKhannah demonstrated two models from different perspectives, including the traditional model and the BOT model to showcase the difference and highlight how BOT projects operate under the real estate field.
The first model titled “Mubarakiya Project”, explains the difference between buying a project from the government versus the BOT model with a residual value equal to the purchase price after 10 years, and based on financial indicators such as Return on Investment (ROI) and the Internal Rate of Return (IRR).
The second model titled “Education Project”, explains the same scenarios of the Mubarkiya, but shows the importance of identifying objectives from each transaction from both perspectives: the government and the investors. Based on the financial data provided, Eng. AlKhannah concluded that in both scenarios, the B.O.T. model will have a much higher ROI and IRR after the 10 years period when compared to the traditional model.
Eng. AlKhannah said: “BOT is the best model for operating projects, because expensive real estate effects the feasibility of the project. Students need to fully comprehend the BOT system and understand how it could be used as a mechanism to finance infrastructure projects."
GUST’s Gulf Financial Center continuously hosts workshops and seminars for students, staff, faculty, and the Kuwait community as a whole, to provide knowledge and shed light on pertinent developments in the financial industry.