Dubai-based Gulf Islamic Investments (GII) acquired a one million square foot Amazon logistics centre in Dortmund, Germany for $144 million. This deal is a testament to the boutique global merchant bank created in Dubai by GII’s co-founder/CEO Pankaj Gupta, who I am honoured to call a friend. I consciously model my own firm Asas Capial on the strategic path laid out by GII and Bahrain’s Investcorp, founded by my Chase Manhattan Bank mentors all those years ago.
GII has evolved into a merchant bank that originates, syndicates and manages complex global property deals for some of the Gulf’s most sophisticated royal, family office and bank investors. Naturally, I feel immensely proud that the firm is based in Dubai. As Dubai becomes the Arabian Gulf’s preeminent private wealth hub, real estate merchant banking will become a stellar growth engine for the emirate.
The Amazon deal offers investors ten year or more in leveraged annual rental yields of 8%. However, there are far higher returns available in the US public industrial REIT market or in Germany’s own Mexico-Poland. For instance, I had recommended America’s preeminent industrial REIT Prologis (PLD) in successive columns in 2016-2017. Prologis returned 28% in 2017, not bad for a liquid stock that my assistant buys for me at a transaction cost of a mere $50 net on the fabulous Interactive Brokers electronic platform! The e-commerce revolution in the Teutonic Fatherland can also be accessed via industrial projects in Poland and the Czech Republic, where leveraged leases for prime tenants can offer 15% net to the investor.