GFH Partners Ltd, the DIFC based global asset management arm of GFH Financial Group, announced that it has successfully launched and closed its seventh logistics and industrial fund in the United States. Keeping with GFH Partners’ thematic investment approach, the Fund comprises two types of assets: industrial and transportation logistics. With a total transaction value of US$300 million, the Fund’s portfolio includes 25 industrial and transportation logistics assets in more than seven locations across the US.
Industrial assets within the Fund include six Class A, newly built mission-critical properties. The assets are well- diversified in terms of location, space usage, and tenant base with long-lease terms and investment grade occupants such as Tesla, Teleflex, Tower Health, and UGI Energy Services.
The industrial real estate sector has shown to be very resilient in challenging times including the pandemic and high inflationary and interest rate environments. Supported by strong demand from continued e-commerce, manufacturing, as well as nearshoring / offshoring of a variety of production facilities to North America. The sector, unlike other real estate asset classes, has the potential to continue displaying strong growth in key metrics largely driven by the positive market fundamentals and growing demand for industrial space. Given the limited supply in the market and low vacancy rates, the sector is prevailing across the US.
The Fund’s transportation logistics assets are comprised of around 20 small to medium sites used for truck parking/ servicing, sorting and fulfillment of goods, and electrical vehicle battery charging, loading/ unloading, and transportation worker facilities. They are 100% occupied and spread across 600 square feet of rentable area leased to the likes of SRS Distribution, Steiner, AT&T, and Penske.
Interest in this asset class is rising due to limited availability, strict zoning requirements, and decreasing supply resulting from growing demand from trucking, bus, and other mass transport operators. In addition, the assets acquired by the Fund capitalize on the reemergence of the Midwest logistics spine, which connects Chicago to Texas and the southern border of the US. Demand in these markets is also supported by tailwinds driven by the onshoring/ reshoring of a number of manufacturing and warehousing activities in Mexico. To manage these assets, GFH Partners has entered into a strategic partnership with Transport Properties, an investment manager uniquely specialized in developing and enhancing properties for trucks, buses, construction, and material storage, ranging from single tenant to large scale, complex integrated facilities. The company has a portfolio of more than 45 properties acquired across 605 acres of land and is vertically integrated, managing each step in-house by controlling the process.
Commenting on the transaction, Nael Mustafa, CEO of GFH Partners, said, “The successful launch and closing of this Fund is another important milestone for GFH Partners and capitalizes on our ability to secure off-market transactions that offer our investors unique risk return profiles which further builds on our existing platform and capabilities. We believe the current phase of the economic cycle is characterized by slowing inflation, the end of the rate hike cycle, and continued strong performance in the sectors GFH Partners specializes in, of which logistics and industrial are key components. The slowdown of new developments and constructions, coupled with strong macroeconomic drivers for industrial and logistics assets are also contributing to stable rent growth and an overall positive outlook for the sector.”
He continued, “The Fund also introduces transportation logistics, a subsector within US logistics with potential for growth due to the combination of limited available land and zoning constraints, indicating the likelihood of rental growth upside. We look forward to maximizing the value and potential of these assets through our partnership with Transport Properties. This is an approach that we have effectively employed, engaging with proven operators on-the-ground with whom GFH Partners is strategically aligned.”
