ADIB provides Saudi investors with financing for acquisition of Manchester property portfolio

Tuesday 25 June 2019
Abu Dhabi - MENA Herald:

Abu Dhabi Islamic Bank (ADIB), a leading Islamic financial institution, has provided financing to Saudi Arabia’s Cedar Tree Investments to acquire a AED 280 million (£39 million) residential portfolio in Manchester, comprising four freehold rental properties, with a total of 163 units. 

The transaction means that property financing in the United Kingdom arranged through ADIB’s office in Knightsbridge, London, has risen to over AED 850 million, secured against property with an aggregate market value of over AED 1.35 billion. GCC investor appetite is driven currently by a desire to diversify portfolio risk, the weakened pound, attractive rental yields in the regional markets and long-term security of income, particularly in cities such as Manchester, Bristol and Birmingham, which continue to outperform London, driven by strong local occupier market conditions.

Paul Maisfield, Head of UK Real Estate at ADIB UK, said: “We continue to see an increase in demand from Gulf investors, particularly for properties in the regional cities with clients focusing on prime assets providing secure and predictable income streams. We doubled our financing assets in the UK in 2018 with the majority of properties being outside London and we are on track to double the size of the portfolio again in 2019.  

“This latest deal is a prime example of investor appetite, as the portfolio provides an attractive yield, in a market which benefits from strong fundamentals with robust demand outstripping supply which is driving rental and capital value growth. We also continue to see keen interest in the regional office and logistics markets, particularly properties let to strong covenant tenants on long term leases with upwards only rent reviews. The availability of suitable products is the main challenge our clients are facing, so as well as providing financing, ADIB is assisting clients with the origination of investment opportunities via our network of agents in the UK.”

The acquisition by Cedar Tree Investments, whose investments are overseen by AIMS Investments, one of Saudi Arabia’s largest investment firms, was for Basil House on 105-107 Portland Street, Salisbury House on 123 Princess Street, 51 King Street, and 341 Great Western Street.

According to data from property consultancy Knight Frank, the total value of the residential investment sector in the UK will rise 68 per cent by 2025, taking the total value of the sector to £146 billion. 

ADIB UK, a wholly-owned subsidiary of Abu Dhabi Islamic Bank, offers full-service proposition, including Shari’a compliant property financing solutions, alongside advisory services for its clients.

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