Arcapita acquires Dubai logistics assets for $150m, cites REIT listing potential

Visual from Arcapita homepage. April 2016

Arcapita, a global Shari’ah compliant alternative investment manager, announced the acquisitions of a portfolio of income-generating logistics assets in Dubai, UAE, for a total transaction value of approximately $150 million.

This transaction, together with eight warehousing facilities in the Al Quoz area of Dubai acquired by Arcapita last year, will bring the value of Arcapita’s UAE logistics portfolio to $250 million.

The new portfolio will be comprised of up to ten warehousing facilities occupying a total built-up area in excess of 1.2 million square feet, primarily in Dubai Investments Park (DIP), reportedly the largest integrated mixed-use industrial, commercial and residential zone in the Middle East.

Atif Abdulmalik, Arcapita’s CEO, commented: “We continue to present our investors with attractive investments in sectors where Arcapita’s management team has significant expertise.

He adds, “We aim to capitalise on the burgeoning logistics sector of the UAE, which is increasingly being driven by the growth of e-commerce and the increase in regional trade to create a diversified logistics platform that covers the entire spectrum of the sector and deliver a stable yield and compelling returns for our investors.”

Arcapita maintains offices in Bahrain, Atlanta, London and Singapore. Its principal lines of business are private equity and real estate, and its management has a 19-year track record of over 70 investments with total transaction value in excess of $30 billion.

As Dubai continues to consolidate its position as the Middle East’s commercial and logistics hub, Arcapita is utilising its sector knowledge to acquire assets that are located in close proximity to Al Maktoum International Airport, Expo 2020 site, and Dubai’s major transport and logistics arteries.

Approximately 60 per cent of the assets are on a long-term lease basis to reputable firms that have undertaken significant capital improvements.

The remainder of the assets are comprised of mixed-use facilities that are occupied by high-quality local and regional tenants and enjoy high electrical load capacities – a key requirement for many tenants.

Leveraging its significant experience in the global logistics market, core members of Arcapita’s management team have managed over $5.3 billion in transactions in this sector across the United States, Europe, Asia and the Middle East.

Martin Tan, Arcapita’s chief investment officer, said, “The Dubai logistics market continues to show signs of growth. Not only does one-third of the world’s population live within a four-hour flight from Dubai but additionally Dubai is regarded as a global redistribution gateway. The manufacturing, transport and logistics sectors are major contributors to Dubai’s economy, accounting for approximately 22% of Dubai’s GDP.”

“In the current low interest rate environment, our investors are looking for investments that provide a steady cash yield. In addition to providing a steady cash yield, we believe that this investment has the potential to be exited through a REIT listing in one of the regional bourses,” he adds.

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