ADIB fortifies UK market presence with $27mn structured finance

By Amirtha P S, Desk Reporter
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UAE’s leading Islamic financial institution, Abu Dhabi Islamic Bank’s (ADIB) UK branch has granted structured financing of $27.23 million to London-based Urbium Capital Partners (UCP) to support their acquisition of a Sainsbury’s store in Edinburgh, Scotland. 

The property comprises an 85,961 square feet (sq ft) prime food store and a 12 pump petrol filling station occupying a 4.6-acre site, constructed in 2013. The property is let to UK’s second-largest supermarket chain, Sainsbury’s on a 25-year full repairing and insuring lease with 16.5 years unexpired and 5 yearly upwards only open market rent reviews.   

The property occupies a highly prominent site offering excellent accessibility and visibility, benefiting from a large and affluent catchment area with a population of 250,000 within 3 miles. 

Paul Maisfield
Paul Maisfield
Head – UK Real Estate ADIB

“We are delighted to have supported UCP on the acquisition of this high-quality asset, which not only provides long term secure income, but also benefits from all of the attributes of a store capable of performing an omnichannel function, thus future-proofed against changes in the sector. We look forward to helping support UCP execute their UK commercial real estate investment strategy targeting well-located core assets with good income visibility and strong tenant covenants, with a focus on cash yield.”

The transaction marks the fourth supermarket investment that ADIB has financed in the UK in the last 12 months which demonstrates the continued strong demand for prime supermarket property investments given the sector resilience demonstrated during the COVID-19 pandemic. 

According to Savills, the UK supermarket sector saw investment volumes reach nearly $2.12 billion in 2021. The CBRE Prime Benchmark Yield for Supermarkets was reduced to 4.0 percent in December 2020, reflecting the continuing strength of the market. Now it sits at 3.50 percent and trending ‘stronger’, reflecting the ongoing improvement in demand during 2021 and its impact on pricing.

Mr. Suliman Al Aujan, the Managing Partner at Urbium Capital Partners, said “We are delighted to have worked with ADIB on our debut transaction. The prime subject asset forms part of Sainsbury’s dynamic omnichannel network and benefits from strong trading fundamentals. UCP will strive to build a defensive portfolio of assets that target income as the principal driver of attractive risk-adjusted returns while looking to achieve capital growth through active management.”

ADIB has a strong track record in offering customized and competitive Sharia-compliant property financing solutions for its clients in the UK. The bank closed over $270 million in senior financing transactions in 2021.

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