GFH Partners Ltd, a subsidiary of GFH Financial Group based in Dubai’s DIFC, has successfully finalized the acquisition of a diverse and multifaceted logistics and industrial portfolio valued at $150 million. This extensive portfolio also includes assets located in the United Arab Emirates.
The portfolio encompasses a strategic blend of stabilized income-yielding assets and promising development opportunities. These assets are strategically situated in key logistics zones and industrial areas within Riyadh and Dubai.
Within the portfolio, there is a mix of light industrial facilities and cold storage capabilities, along with various distribution and warehousing assets. These assets are currently leased to a diverse range of esteemed tenants, including both international and regional entities.
The decision to invest in Saudi-based logistics aligns with the significant growth projected for the Kingdom’s non-oil sector GDP, expected to reach 5.9% in 2023. Similarly, the UAE anticipates a 3% economic growth in 2023, followed by a 4% increase the subsequent year, predominantly driven by non-oil sectors. Dubai’s robust position as a thriving logistics hub is sustained by the consistently high demand for container and trade volumes in key zones such as Jebel Ali, Dubai South, and Dubai Investment Park.
In addition to the existing portfolio, GFH Partners’ GCC logistics platform includes strategic development plans for logistics and light industrial facilities. These initiatives, undertaken in collaboration with prominent local developers, are poised to capitalize on the anticipated growth in this sector.
The rising trends in retail sales, e-commerce, and the shift towards newer and higher-quality facilities have also been influential factors. Furthermore, Saudi Arabia’s Vision 2030 initiative plays a pivotal role, as it aims to establish 59 logistics centers spanning over 100 million square meters across the country.
Since the introduction of Vision 2030 in 2016, Saudi Arabia has invested over $1 trillion in real estate and infrastructure developments to position itself as a global logistics hub. Recent agreements made at the 2023 G20 New Delhi summit in September 2023 further support the growth prospects in the logistics sector. These agreements involve the establishment of shipping and railway links connecting Europe, the Middle East, India, and the United States.
Nael Mustafa, Chief Executive Officer of GFH Partners, expressed his satisfaction with the acquisition, emphasizing that it combines income-generating assets with substantial development opportunities. This acquisition aligns with the rapid modernization and development of Saudi Arabia’s transportation and logistics industry, in line with Vision 2030.
GFH Partners aims to expand its GCC logistics real estate platform to SAR1 billion ($250 million) over the next 12-18 months, capitalizing on favorable demographics, positive capital market trends, and government initiatives to strengthen the logistics industry. Saudi Arabia is poised to become a prominent global logistics hub in this regard.
GFH Partners has a global footprint, having successfully acquired over 50 logistics assets across three continents in six countries. The company’s expertise and capabilities extend to the logistics sector, where it has transacted over $4 billion in recent years, leasing units to credit-rated tenants, including Amazon, FedEx, DHL, General Mills, and Michelin, among others.
As part of GFH Financial Group, GFH Partners manages more than $6 billion in real estate assets, contributing to the group’s total assets and funds under management, which amount to $18 billion. The company operates under the regulation of the Dubai Financial Services Authority (DFSA) and complies with regulations from other relevant authorities, ensuring adherence to international investment standards.