Bahrain’s Arcapita acquires FedEx distribution centre in US

Purchase brings the amount of recent deals Arcapita has completed in the US industrial market to more than $200m

Cedardale Distribution Center. Courtesy Arcapita

Bahrain’s Arcapita acquired a major distribution centre in the US as the investment company continues to expand its industrial real estate portfolio in the world’s biggest economy.

The distribution centre in Dallas is leased to delivery company FedEx and is an integral part of its distribution network in the southern US, according to a statement from Arcapita on Sunday.

“The US industrial real estate sector has proven to be recession resilient with sustained, high occupancy levels ...  due to the mission-critical nature of warehousing and distribution facilities,” the company said. “Most recently, during the Covid-19 pandemic, the industrial sector significantly outperformed other sectors including office, retail and hotel.”

Demand for warehouses and distribution centres rose globally due to an e-commerce boom in the wake of the movement restrictions related to the coronavirus pandemic.

Arcapita also recently bought 16 industrial real estate properties in Cleveland and Indianapolis. These purchases represent a combined transaction value of over $200 million, covering approximately 3 million square feet of US industrial real estate space across key distribution markets, the company said.

“Arcapita has a strong track record of investing in the logistics sector, having managed and exited over $5.5 billion in logistics real estate transactions globally,” Martin Tan, chief investment officer at Arcapita said. "With the accelerated growth of e-commerce and increasing supply chain sophistication, the demand for modern logistics and warehousing space will grow exponentially.”

The company is also looking to acquire additional assets in the coming months, according to Brian Hebb, head of US real estate at Arcapita.

“We are focused on acquiring highly functional properties leased to investment grade tenants on a 10-15-year basis,” he said.

Over the past 24 years, Arcapita has completed more than 90 investments with a total transaction value exceeding $30bn in real estate and private equity, the company said.

In its last annual report for the year to June 30, 2020, the company highlighted the US industrial market as a "large but highly fragmented" sector, where only 20 per cent of the 14 billion square feet of warehouse space is institutionally owned.