Bahrain’s Arcapita Closes KSA Logistics Fund III for $500 Million

Arcapita Capital Company (Arcapita), the shariah-compliant investment firm and a subsidiary of Arcapita Group Holdings Limited (Arcapita Group), has closed the KSA Logistics Fund III for $500 million, with participation from a leading sovereign wealth fund from the GCC region and other major institutional investors.

Arcapita has already deployed a substantial amount of the fund in a sizable portfolio of industrial real estate assets across the manufacturing and warehousing sectors. Along RIKAZ, a prominent large-scale real estate developer in Saudi Arabia, Arcapita is developing a logistics park called “The Node” in Riyadh.

Arcapita also launched ARC UK Industrial Portfolio, a $100 million diversified portfolio of income-generating, multi-let industrial buildings located across the UK, with a focus on energy efficiency upgrades a few months ago.

Over the coming months, Arcapita expects to execute on a pipeline of further assets situated in strategic locations across Riyadh, Jeddah, and the Eastern Province. Arcapita will also take a built-to-suit approach, whereby properties will be developed with long-term off-take arrangements with tenants.

This Fund further demonstrates Arcapita’s strategy of bringing the firm’s international expertise in industrial real estate to the Kingdom’s industrial sector and support its ambitions of becoming a global logistics hub.

Arcapita currently manage over $1 billion of industrial warehousing assets in Saudi Arabia and the GCC region, and its investor base includes pension funds, sovereign wealth funds, and financial institutions.

Major Milestone

Hisham Al Raee, Deputy CEO of Arcapita Group, said that the closing of KSA Logistics Fund III marks an important milestone in his company’s strategic expansion in Saudi Arabia, the largest economy in the MENA region.

 “The industrial and logistics sectors are key components of the Kingdom’s Global Supply Chain Resilience Initiative, which aims to attract $10.6 billion in investments. We look forward to continuing to deploy our expertise in the industrial real estate sector to play a key role in transforming the Kingdom into a global logistics hub,” Hisham added.

Yousif Al Abdulla, Managing Director and Head of MENA Investment at Arcapita Group, said that they expect Saudi Arabia’s industrial real estate market to experience substantial growth over the long term, driven by the significant and continued growth of e-commerce across the Kingdom and by strong government-led investment in infrastructure and the industrial sector.

“Arcapita Group’s portfolio strategy will leverage opportunities presented by the National Industrial Development and Logistics Program, as well as the Kingdom’s Vision 2030 plan,” Yousif added.

Arcapita Group manages more than $6.5 billion in industrial and logistics real estate transactions globally, including over $1.5 billion in the GCC region, over the past 25 years. Furthermore, the Group has a strong track record of investing in the Kingdom, with nearly $400 million in investments over the past 10 years.