Saudi-based Sidra Capital on Tuesday announced that it has initiated its first US-based single tenant industrial real estate aggregation program.
The fund, which was fully subscribed within three weeks from launch, will invest approximately $155 million in the acquisition of industrial properties in the United States.
Saudi’s Sidra invests in US industrial properties in $206m deal
US portfolio is comprised of 30 fully occupied single tenant net leased assets spread across 15 key states
The fund is part of Sidra’s strategy of investing in industrial real estate and represents the company’s first real estate aggregation strategy, a statement said.
“Industrial, warehouse and logistical real estate continue to generate strong demand,” said Hani Baothman (pictured below), chairman of Sidra Capital.
“Despite the near-term impact of the pandemic on the commercial real estate sector, we are witnessing continued growth in the US industrial sector, and to take advantage of this, we have utilised our proven asset sourcing ability to create a portfolio that we believe will generate an attractive cash on cash return with significant additional value created by aggregating the individual properties into a single portfolio.”
The US industrial real estate market was valued at $1.5 trillion in 2018, which is equivalent to about 7 percent of the US GDP. The total industrial real estate space square metre totals about 2 billion, accounting for about 30 percent of total US commercial real estate space.
Inbound investments in the US industrial real estate increased from $6.3 billion in 2019 to $8.5 billion in 2020, registering a solid 35 percent year-on-year growth.
The fund has been launched as demand for industrial real estate has been rising steadily for several years, driven by the emergence of two main structural drivers – the acceleration of e-commerce adoption and the need for more inventory as supply chains emphasize resilience over efficiency.
As a result, the need for warehouse and distribution space is expected to increase in the future, resulting in higher rents and lower vacancy rates.
Saudi’s Sidra buys closest office space to London’s Buckingham Palace
Sidra Capital announces deal for 4-5 Buckingham Gate located in the heart of St James Park in London
According to Sidra, the reopening of the US economy is also boosting demand for warehouse and logistics facilities.
Sidra Capital said it is making the investment through its Heartland industrial aggregation fund. The company currently owns 40 industrial properties strategically located in metropolitan areas across the US.
The new fund bolsters Sidra Capital’s real estate acquisitions strategy in the United States, where deal volume has surpassed $1.2 billion as of Q3.
Sidra Capital was founded in 2009 and is headquartered in Jeddah with offices in Riyadh, London, and Singapore.