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UK commercial property has had a breakout year, with demand for logistics and warehouses running high. Image Credit: Agency

Dubai: Abu Dhabi Islamic Bank is putting its full funding might behind property – in the UK. The bank has extended more than Dh1 billion in commercial real estate financing this year in that market, with two deals closed last month alone.

The overall ADIB property portfolio in the UK now is valued at about Dh2.5 billion. What’s interesting is that a few of these transactions relate to real estate outside of the London hotspots.

According to Paul Maisfield, Head of UK Real Estate at ADIB, “Investor appetite continues to be strong, particularly for assets offering secure long dated income in the regional markets, providing attractive cash on cash returns. ADIB remains committed to providing financing to investors that are seeking attractive returns within the real estate sector.”

ADIB extended Dh181 million to Saudi Fransi Capital (SFC), an investment arm and wholly-owned subsidiary of Banque Saudi Fransi, for their acquisition of the Gartner HQ office building in Egham. The Grade A office building was constructed in 2017, with 107,842 square feet of space arranged over ground and four upper floors, along with a four-deck car park.

The office is let entirely to Gartner UK ltd., on full repairing and insuring terms expiring in September 2032 (with no tenant break options), thus providing an unexpired term of 11 years, with a parent guarantee from Gartner Inc.

Busy phase
In the last three years, ADIB transactions include financing for Albilad Capital to acquire the PWC HQ in Belfast; The Bank of London and the Middle East (BLME) to acquire the Centrica HQ in Edinburgh , Rasmala to acquire a Tesco let supermarket in Manchester and for Saudi Arabia’s Cedar Tree Investments to acquire a AED 280 million (£39 million) residential portfolio in Manchester.

ADIB has also provided Dh36 million in financing to the Al Rajhi Legacy Fund on their acquisition of Olympus House in Tachbrook Park, located to the southeast of Birmingham. The property is let to Wright Hassall LLP, a full-service legal firm.

It comprises a Grade A office building arranged over ground and two upper floors, covering 44,411 square feet, developed in 1988. The tenant has occupied the property since 2006 and entered into a new reversionary lease in 2013, which expires towards the end of 2032.

Al Rajhi Legacy Fund agreed to purchase the property for Dh56 million.

Stock - ADIB UK
ADIB's UK office is concluding an extremely successful year. All those property-related transactions helped. Image Credit: Supplied