Bahrain’s Investcorp plans to invest up to $1 billion in the real estate market across the Gulf Cooperation Council countries over the next five years, with a key focus on Saudi Arabia as it looks to capitalize on the Kingdom’s booming logistics sector.
The global investment manager recently made its first real estate acquisition in Saudi Arabia, with a 215,000 square feet temperature-controlled warehouse in Dammam. This is the first of $100 million worth of real estate investments that the firm is currently assessing in the Kingdom, the company said in a statement.
The company has leased out its Dammam warehouse to Racking Systems Logistics Services Co., also known as RTL, a third-party logistics company, which serves the Saudi market in the temperature-controlled warehousing and distribution segment.
This brings the value of Investcorp’s global warehousing logistics investments to over $4 billion, representing around 42 million sq. ft of industrial space.
“The Saudi Arabian real estate market is experiencing strong growth. The logistics and industrial sectors have enormous potential as key pillars of Saudi Arabia’s Vision 2030 agenda to transform the Kingdom into a leading industrial powerhouse and a global logistics hub,” said Hazem Ben-Gacem, co-CEO of Investcorp.
He added: “Investcorp is a natural partner in this growth journey, and this acquisition leverages our global experience investing in the logistics sector – particularly in the US, Europe and India.”
Investcorp disclosed that this is the first in a series of investments that the company is planning to make in the near future – with a view to investing $1 billion over the next five years.
Babak Sultani, head of GCC Real Estate at Investcorp, added: “Our first acquisition of a warehouse facility in the GCC expands on our recent activity in the region where we see long-term growth dynamics, particularly in the Saudi Arabian market.”
He said the company has ambitious plans across diversified real estate sectors that support healthcare, education, and entertainment, as well as consumer goods, tech-enabled services, manufacturing, transport and logistics, and industrial services.
The acquisition follows the company’s another recent investment in the GCC logistics sector as its Gulf Pre-IPO Growth Fund led a $100 million financing round in TruKKer Holding Limited in September 2022.
Investcorp also acquired a majority stake in NourNet, one of Saudi Arabia’s leading connectivity and information and communication technology services providers, according to the press release.
Investcorp, which entered Saudi Arabia in 2008, has since then publicly listed four Saudi businesses on Tadawul, generating over $40 billion in potential demand from their respective pre-listing marketing exercises.
As of June 30 2022, Investcorp Group had $42.7 billion in total assets under management including assets managed by third-party managers.