The bank, owned by Qatar Islamic Bank, RUSD Investment Bank of Saudi Arabia and Global Investment House of Kuwait, would initially invest in budget hotels in Malaysia, Thailand, the Philippines and Indonesia, Mohammed Zamri Shariff said.

The bank would also refurbish so-called class B and C office buildings and upgrade them to high-end office spaces, he said.

“We are looking at some undervalued properties in Kuala Lumpur and the Asean region,” Shariff said.

“This will be our first Asian fund that will be invested solely in real estate development.”

The fund is due to be launched next year by the bank, which was incorporated in Malaysia in 2005.

The global financial crisis had pushed property prices lower, creating an opportunity for long-term investors to snap up these assets, Shariff said.

The bank planned to raise the bulk of the $500m from investors in the Middle East, including the UAE and Saudi Arabia, countries looking for attractive outlets for their funds, he said.

“Even if oil prices have fallen, there is no liquidity issue in the Middle East. They are still looking to invest their petrodollars,” he said.

In Malaysia, property prices were expected to fall by as much as 20 per cent this year and next, ending six years of uninterrupted growth, he said.

“It’s a buyers market,” he added.

While valuations had fallen to attractive levels, the bank remained cautious in investing. Most Malaysian banks had also scaled back lending to the property sector due to the subprime crisis, he said.

Loans to developers in Malaysia grew just 8pc in August, less than the 30pc rise in July, Shariff said.

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