Saudi Arabia-based Riyad Capital said its Shariah-compliant real estate investment fund, Riyad REIT, has invested SAR 233 million (appr. $62 million) in a US logistics portfolio.
The portfolio, comprising five Class A logistics properties, is fully leased to high-quality tenants with a weighted average term of 15.5 years in four different locations (St. Louis – Missouri, Houston- Texas, Greenville/Spartanburg – South Carolina, Birmingham-Alabama), USA.
The properties are newly developed, built-to-suit logistics totaling over 4.5 million square feet across the Southeast U.S. – the fastest growing region in the U.S. that is recognized as an industrial and logistics hub. The 15-year (+) leases are to three strong tenants:
- Amazon (S&P A-, Fortune 500 (no. 2) company, $1.67 trillion market cap),
- Lowe’s (S&P BBB+, Fortune 500 (no. 44), $149 billion market cap), and
- Techtronic Industries (one of the largest global power tools companies with a market cap of $32.8 billion).
Riyad Capital said logistics is considered one of the strongest real estate asset classes with significant level of institutional capital pursuing the asset class.
”The investment is part of the fund’s capital increase process by issuing new shares, and has been funded entirely through the available shariah-compliant short-term debt facility for Riyad REIT. The facilities will be repaid after the capital raising process is complete,” the company said.
According to the company, the investment is expected to generate an average annual yield of 7.5% to Riyad REIT over a 4-year investment period.