Audacia Capital tucks into culinary boom with investment in Al Safadi Restaurants

About half of the new retail brands setting up shop in Abu Dhabi and Dubai are either cafes or other food-and-beverage outlets, according to CBRE. Lee Hoagland / The National

Investors are showing a healthy appetite for the region’s booming food and beverage industry.

Audacia Capital, a Dubai-based investment bank, has acquired a 30 per cent stake in Al Safadi Restaurants, a chain of Lebanese eateries.

It follows the Dubai-listed retailer Marka’s completion last month of its buyout of Reem Al Bawadi, a Middle Eastern restaurant chain, for Dh315 million.

“The acquisition of Al Safadi marks our first investment in the burgeoning food and beverage sector,” Emad Mansour, the founder and chief executive of Audacia Capital, said yesterday.

“Rapid urbanisation, the increase of a multicultural young population and rising incomes have led to a change in consumer consumption habits.

“Eating out has become a major attraction, and food service outlets have become preferred destinations for business meetings and family gathering.”

Audacia did not disclose the amount of its investment in Al Safadi but said it was planning to expand the business in the UAE and the Arabian Gulf.

In the next three years, the restaurant group plans to open more branches in Dubai, Abu Dhabi and Saudi Arabia.

“Our partnership with Audacia Capital comes at an opportune time as the food service sector in the Mena region, and specifically in UAE, is undergoing unprecedented growth,” said Fadi Al Safadi, the chief executive of Al Safadi Restaurants.

“We have an ambitious growth strategy and are confident that in cooperation with Audacia Capital we will be able to successfully expand into the region and reinforce Al Safadi brand.”

Although the food and beverage industry is expanding rapidly in the UAE, there are concerns that it may be overheating.

The professional services consultancy PwC expects a 50 per cent growth in the sector to US$25 billion by 2018.

But its rival KPMG warns of a glut in the market, as an additional 1,600 food-and-beverage outlets are expected to open by 2019. There are presently more than 6,000 outlets in the UAE.

Audacia Capital is nevertheless betting on the region’s rapid population growth, which is expected to reach 52.8 million by 2020 from about 49 million today.

The UAE’s food and beverage sector is also getting a boost from tourism.

Dubai is expected to receive about 14.3 million foreign visitors this year, an increase of 8 per cent from last year, according to the latest MasterCard Global Destination Cities Index.

About half of the new retail brands setting up shop in Abu Dhabi and Dubai are either cafes or other food-and-beverage outlets, according to the international real estate consultancy CBRE.

“The food and beverage sector in the GCC will continue to be a lucrative market, and Audacia Capital intends to invest in well-managed and promising companies within this segment,” said the investment bank. Al Safadi was founded in Beirut in 1994, and expanded to Dubai six years later. Today, the group has two restaurants and a cafe in Dubai, and a restaurant in Erbil, Iraq, which opened in October 2013.

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