Kuwait's largest Islamic bank said Sunday it has signed a $450 million deal with a US real-estate investment trust to buy high-income residential real estate in major American cities. The deal between Kuwait Finance House and Denver, Colorado-based apartment-building owner UDR Inc. is the second major foreign investment by a rich Gulf nation in the past few days. "The joint venture will seek to acquire high-income residential real estate in major cities in the United States," according to a statement posted on KFH's Web site. Under the deal signed in London on Friday, KFH's participation is 70 percent, while UDR will shoulder a 30% share, the statement said. Gulf countries and their sovereign-wealth funds have been adopting an increasingly cautious approach to foreign investment as the global economic meltdown eroded demand and prices for crude oil, their main source of revenue, and hammered equity and credit markets. But this deal, coupled with Qatar's announcement Friday that it would buy a 10% stake in German sports-car maker Porsche SE, as well as acquire 17% of Volkswagen AG's ordinary shares, could indicate that the oil-rich sovereign-wealth funds are again looking abroad. The Qatar investment is valued at over $10 billion. The Islamic bank said the joint venture would target class "A" assets with a minimum value of $20m. that are less than seven years old, and the venture intends to be fully invested over a two-year period. The bank said it was targeting an internal return rate of 12% to 14% annually. Ali al-Ghanem, KFH's international real-estate manager, said the partnership with UDR shows the bank was trying to return as a "major player" to the American real-estate market, after it had liquidated a large portion of its investments there before the economic crisis began. The statement quoted Tom Toomey, UDR's president and CEO, as saying the company was looking forward to investing with its new partner during "these opportunistic times." He said his company owns 50,000 apartment homes throughout the US, as well as thousands of houses under renovation.