HSBC Saudi Arabia has appointed Shariah-compliant alternative investment firm Arcapita as an advisor for a $150 million investment fund targeting logistics and warehouse assets in Saudi Arabia and the U.A.E.
Bahrain-headquartered Arcapita will identify assets and assist in the financing and sale of assets, as well as provide asset management services, structuring, due diligence, monitoring and fund administration for HSBC Saudi Arabia’s fund.
Arcapita’s CEO Atif A. Abdulmalik said his firm’s recent transactions highlighted opportunity in logistics in the GCC, leading to its agreement with HSBC Saudi Arabia. “As hubs facilitating trade between key international ports, and gateways to Africa’s $3 trillion economy, Saudi Arabia and the U.A.E. are thriving logistics markets with a solid long-term investment outlook,” said Abdulmalik in a press release.
The Saudi Arabian and U.A.E. logistics sectors are ranked as the third and fifth most attractive within emerging markets, according to the Agility Logistics Market Index. For its part, Saudi Arabia is expected to increase spending on air and sea port infrastructure as part of its Vision 2030 plan. Likewise, the U.A.E. logistics sector is set to grow as global trade, e-commerce and retail sales help Dubai improve its position as a redistribution hub.
“With Saudi Vision 2030 and the resilience and prosperity of the Dubai logistics market, Saudi Arabia and the U.A.E. remain key markets for Arcapita. In terms of real estate investments, the GCC logistics sector provides an attractive cash yield in today’s low interest rate environment, as well as significant potential for capital appreciation,” said Martin Tan, Arcapita’s Chief Investment Officer.
This isn’t Arcapita’s first foray into logistics. The firm says it has completed transactions in the logistics sector exceeding $5.3 billion in the GCC, U.S. and Asia. In addition to Bahrain, Arcapita has offices in Atlanta, London and Singapore.
Meanwhile, earlier in January 2017, Arcapita acquired a controlling interest in U.S.-based signage and lighting services firm MC Sign Company in a deal worth in excess of $100 million.