HSBC appoints firm to administer regional logistics fund

29 January 2018
Real estate investments in the logistics sector in the UAE and Saudi Arabia seen to provide attractive cash yield

HSBC Saudi Arabia has appointed Bahrain-based Arcapita to assist in managing and administering a $150m investment fund targeting logistics and warehouse assets in the UAE and Saudi Arabia.

Arcapita will provide asset management services, structuring assistance, due diligence, monitoring and fund administration for the fund, which is expected to support the two countries’ logistics sectors.

“As hubs facilitating trade between key international ports, and gateways to Africa’s $3tn economy, Saudi Arabia and the UAE are thriving logistics markets with a solid long-term investment outlook,” Atif Abdulmalik, Arcapita CEO, said in a statement.

The logistics sectors  in the UAE and Saudi Arabia are ranked the third and fifth most attractive within emerging markets,  respectively, according to the latest market index published by Kuwait-headquartered Agility Logistics.

According to Martin Tan, Arcapita's chief investment officer, real estate investments in the GCC logistics sector “provide attractive cash yield … as well as significant potential for capital appreciation.”

Saudi Arabia is expected to benefit further from Saudi Vision 2030, with increased potential government spending on air and sea port infrastructure.

Dubai’s hosting of Expo 2020 could also further strengthen the emirate’s status as a global distribution hub in view of the forecast increases in world trade, e-commerce and retail sales.

Arcapita said it has completed logistics-related transactions exceeding $5.3bn across the GCC, US and Asia. In Saudi Arabia, the firm has acquired, managed and exited income-generating logistics properties valued at $400m. It has also completed logistics transactions worth $350m in the UAE, including a $150m stake in a portfolio at Dubai Investment Park.



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