GCC real estate market to see $1bn in investments in five years from Investcorp

The firm has already made a number of investments in the GCC’s logistics sector

Alternative investment firm Investcorp plans to invest up to $1bn in the GCC real estate market over the next five years, the firm has said.

The move follows Investcorp’s first real estate acquisition in Saudi Arabia – a new 215,000sqft temperature-controlled warehouse located in Dammam. This is the first of $100mn worth of real estate investments that the firm is currently assessing in Saudi Arabia, the firm explained.

“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-Chief Executive Officer of Investcorp.

In late November 2022, Saudi Arabia said it would spend US $704mn to develop Darin and Tarout Island.

Hazem Ben-Gacem, Co-Chief Executive Officer 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. This is the first in a series of investments that we are planning to make in the near future – with a view to investing $1bn over the next five years.”

The Dammam warehouse is said to be fully leased to Racking Systems Logistics Services Company, a third-party logistics company, which serves the Saudi market in the temperature-controlled warehousing and distribution segment. The investment in the Dammam warehouse – which can store up to 32,000 pallets of goods – will bring the value of Investcorp’s global warehousing logistics investments to over $4bn, representing approximately 42m sqft of industrial space, the firm noted.

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. We have ambitious plans across diversified real estate sectors that support healthcare, education, entertainment, consumer goods, tech-enabled services, manufacturing, transport and logistics, and industrial services.”

In early January 2023, following encouraging signs, David Clifton, Regional Director – Middle East & Africa at Faithful+Gould shared his observations on Oman’s construction industry.

The acquisition follows another recent investment in the GCC logistics sector. In September 2022, Investcorp’s Gulf Pre-IPO Growth Fund led a $100mn financing round in TruKKer Holding Limited, the MENA region’s largest digital freight network.

Investcorp said it also acquired a majority stake in NourNet, one of Saudi Arabia’s leading Connectivity and ICT services providers. Since Investcorp established a presence in the Kingdom of Saudi Arabia in 2008, the firm has publicly listed four Saudi businesses on Tadawul, generating over $40bn in potential demand from their respective pre-listing marketing exercises. As of December 2022, Investcorp’s portfolio companies employ over 20,000 employees across the Kingdom of Saudi Arabia, the firm concluded.

Also in early January 2023, JLL noted that the global realty investment boom is being led by the GCC.


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