Sidra Capital and Gatehouse Bank acquire TDG Distribution Centre, near Glasgow, Scotland UK for GBP 22.4 million
Jeddah 5 June 2012
Sidra Capital (Sidra), a CMA regulated Shariah compliant financial services company based in Saudi Arabia and Gatehouse Bank (Gatehouse), an FSA regulated UK-based Shariah compliant bank specialising in UK real estate, today announced the completion of their second real estate acquisition in the United Kingdom Real Estate Fund (SURF) for GBP 22.4million.
Drawing on the key strengths of the two partners - Gatehouse's Real Estate and Shariah expertise in the UK's market sector and Sidra's comprehensive knowledge of alternative investment fund activities in the Middle East - the fund will acquire a diverse real estate portfolio in the UK, offering Saudi Arabian investors access to one of the world's most transparent and well-regulated markets.
Hani Othman Baothman, Managing Director and CEO, Sidra, commented: "Sidra Capital and Gatehouse Bank are 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. With the Fund's second acquisition in TDG UK, a major European logistics warehouse distribution centre, we continue to harness investments that meet our asset criteria for tenant profile and strength. Given a promising pipeline of potential acquisitions, SURF's capital has been invested promptly and effectively by the team. "
The Property is entirely let to TDG (UK) on an unexpired term of more than 15 years. As a leading logistics company in Europe with a reported turnover of more than £493m, TDG services UK and European blue-chip clients such as global food manufacturer Kelloggs and supermarket chain Tesco. Combined with favourable rental review terms, the property is also positioned in a premier logistics and distribution location; the asset will provide a secure and steady income stream for investors, with an average distribution yield of 7.00% and a projected IRR in excess of 9.00% over the anticipated 5 year hold period.
Adam Cavanagh, Head of Real Estate, Gatehouse Bank said, "SURF identifies a requirement from international investors to provide secure, income producing, low risk investment opportunities in the relative safe haven of the UK market. SURF has been created specifically for those investors looking for exposure to the UK real estate market. Following the second acquisition, SURF is already yielding a return of 7.00% to investors. These returns are secured against high quality properties let to financially strong tenants on long lease terms providing security of income over the projected five year life of the fund and beyond.
Notably, having traditionally focused on Central London offices, overseas buyers from Asia and the Middle East are starting to become more active, identifying opportunities in UK for covenant quality and lease length. Well-let logistics units which provide secure income streams continue to attract significant interest from both UK Funds and private investors.
The SURF fund is a joint venture between Sidra and Gatehouse and, open to both UK and international investors, aims to deliver an average annual distribution yield of 7.00%.
-Ends-
• The acquisition of TDG Distribution Centre, Eurocentral in Glasgow, UK, is the second deployment of the SURF capital.
• The property will produce an average annual distribution yield of circa 7.00% over five years, and has been let to TDG (UK) Ltd for a 20-year term from 2009.
• The 30,625 square meter property benefits from its location in Scotland's prime logistics and distribution regions
About Sidra Capital
Sidra Capital, a CMA regulated Shariah compliant financial services company based in Saudi Arabia with extensive experience in real estate fund activity, has partnered with Gatehouse Bank, an FSA regulated UK-based Shariah compliant bank specialising in UK real estate. Through their combined expertise, these institutions have brought The Sterling United Kingdom Real Estate Fund (SURF) to the investor market with a view to reaching a target equity size of GBP100million. SURF is registered with the CMA in Saudi Arabia. For more information please visit our website www.sidracap.com
About Gatehouse Bank
Gatehouse Bank operates as a Shariah-compliant wholesale investment bank based in the City of London focusing on: Real Estate, Treasury, Wealth Management and Shariah Advisory services.
For more information please visit our website www.gatehousebank.com
For further information please contact:
Ragheed Imad Moghrabi
Sidra Capital
+966 (2) 2611 101
rmoghrabi@sidracap.com
Angelena Lee
Gatehouse Bank
+44 (0) 20 7070 6000
angelena.lee@gatehousebank.com
© Press Release 2012