Saudi fund seals $56m UK property deal
Jeddah, October 14, 2012
Sterling United Kingdom Real Estate Fund (Surf), a joint venture between Saudi-based Sidra Capital and Gatehouse Bank of Britain, said it has completed its third real estate buy in Maidenhead, UK for £32 million ($56.2 million).
The latest purchase brings Surf’s total assets under management to over $75 million since its launch in January 2012, said a senior official.
Surf has successfully deployed its fund capital with its first property acquisition in The Co-operative Group Distribution Centre located in Huntingdon, near Cambridge, UK for £23.55 million, followed by the purchase of TDG Distribution Centre, near Glasgow, Scotland for £22.4 million.
The deal is for the newly-constructed 74,146 sq ft Market House, in Maidenhead will significantly contribute toward Surf’s targeted return of seven percent per annum. The property serves as EMEA headquarters for Adobe Systems Europe on a weighted unexpired lease term of 10 and a half years.
Adobe Systems is one of the largest global software providers, with a portfolio focused on creating digital and general creative through a combination of internally developed and acquired software.
The asset will also provide a secure and steady income stream for investors, with a projected internal rate of return in excess of 9 per cent over the anticipated five-year hold period.
The purchase, which was secured in an exclusive off-market transaction, will further enhance Surf’s acquisition strategy, which focuses on secure, income producing, low-risk opportunities in the relative safe haven of the UK market.
"This property was selected for acquisition due to its attractive lease profile and strong anchor tenant," remarked Hani Othman Baothman, the managing director and CEO of Sidra.
"Securing long-term sustainable returns from our investments is key and, thanks to its positive regulatory environment, maturity, transparency and liquidity, the UK is considered to be one of the safest locations for investment in the world," he noted.
"By diversifying our risk across multiple asset classes, Surf's mixed portfolio will provide an effective hedge against inflation with regular income distributions and strong potential for capital growth," said Baothman.
"Sidra and Gatehouse were successfully working together towards a shared investment objective with Surf, identifying and securing high quality Shariah-compliant assets with driven rental and capital value growth," he added.-TradeArabia News Service