Investcorp sells $200m worth of US property

Investcorp, which counts Abu Dhabi’s Mubadala Investment Company as its biggest shareholder, sold a portfolio of industrial properties in the US for more than $200 million (Dh734.5m).

The completion of the transaction generated “strong returns” for the company, which is based in Bahrain.

“We are pleased with the result of this exit and our team’s ability to generate strong returns amid a challenging environment,” Timothy Mattar, global head of distribution at Investcorp, said yesterday.

The industrial real estate assets in Boston and Chicago were acquired by Investcorp in 2017. The Boston properties comprised a warehouse, distribution and flex real estate portfolio, while properties in Chicago were primarily used for the storage and distribution of frozen food products.

“Industrial, warehouse and logistics real estate assets are essential for driving e-commerce and supporting supply chains, which is why we increased our focus on this area several years ago,” said Babak Sultani, managing director and real estate product specialist at Investcorp.

“We remain focused on continuing to identify resilient investment opportunities that are supported by long-term trends such as e-commerce-driven industrial real estate.”

Middle East sovereign wealth funds and investment companies from the region have been actively investing in the US real estate sector for many years because of attractive returns.

Established in 1982, Investcorp is one of the oldest Middle East alternative asset managers with $31.1bn of assets under management as of December 31, 2019, according to its half-year accounts.

Last year, Investcorp entered into a partnership with Dock Square Capital – a company founded by former Florida governor Jeb Bush – to expand its business in the US.

Investcorp owns about 230 industrial properties across the US totalling about 1.7 million square metres. In November, it bought a portfolio of 126 industrial properties in the US for $800m. The company also invested $164m to acquire two properties in the US earlier this year.

Despite a virus-induced economic slowdown there are strong opportunities to invest in the US real estate sector, according to some industry insiders.

Second-tier cities in the midwest, centre and southeast of the US including Indianapolis, San Antonio, Cincinnati, Kansas City and Houston, offer good investment opportunities, Ian Russ, managing partner of real estate investment management company Delta Rhino Capital, said at a webinar last month.