Investcorp sells property worth $200m in the US

Industrial real estate in Boston and Chicago were acquired by the company in 2017

Investcorp sold a portfolio of industrial real estate properties located in the Boston (in picture) and Chicago metropolitan areas in two separate transactions for a combined total of more than $200 million. Courtesy: Investcorp
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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), with the transaction generating “strong returns”.

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

The industrial properties 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.

“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 firms from the region have been 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 19 million square feet.

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 this year.

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

Second-tier cities in the Midwest, centre and south-east of the US including Indianapolis, San Antonio, Cincinnati, Kansas City and Houston, offer good investment opportunities, Ian Russ, managing partner of Delta Rhino Capital, a real estate investment management firm, said at an online seminar last month.