Bahrain-based Islamic investment bank, GFH Financial Group has acquired a portfolio of medical offices in the US in a deal valued at $200 million, as part of its strategy to build a portfolio of stabilized assets driven by solid long-term fundamentals and operating growth.
The medical office’s portfolio, spread across seven states including North Carolina, South Carolina, Georgia, Utah, Wisconsin, Ohio and Texas, consists of 11 assets with more than 400,000 square feet of space.
The Sharia-compliant transaction will increase the value of the GFH group’s US healthcare portfolio to more than $400 million. Medical offices refer to facilities leased to outpatient medical and related services. These include different specializations of medicine, labs and ancillary medical services.
Nael Mustafa Co-CIO – GFH
“The pandemic has underlined a need for more outpatient services and continued demand for healthcare services. As a result, we are seeing strong investor sentiment in the medical office sector. This trend is particularly true in the US, where healthcare spending comprises around 18 percent of gross domestic product, compared to around 10 percent for most other developed countries.”
The medical offices market is positioned for steady growth in the wake of the pandemic following a sizeable shift towards outpatient care to reduce pressure on overstretched hospital systems. Investment in medical offices has quadrupled over the last decade and medical office closings accounted for nearly 30 percent of all US office sales for the year ending in March 2021, GFH said without citing sources.
Some of the assets that GFH acquired are leased to major healthcare operators such as Cleveland Clinic, Texas A&M Health Science Centre, Novant Health, Spartanburg Regional Healthcare System, Texas Health Resources and Baylor Scott & White Health.
The assets cover a range of specialist care sectors and are positioned on hospital campuses or near hospitals with a solid customer base across the Southeast, Midwest and Southwest, the company stated.
Currently, GFH is stepping up its investments in the US market in a bid to tap into post-pandemic opportunities. Earlier this year, it acquired a $100 million student housing portfolio affiliated with several top universities in the US as part of its expansion plans. The company also acquired a US warehousing and distribution logistics center for $100 million.
In October, GFH bought a residential tower in Baltimore in a joint venture with Broadshore Capital Partners for $90 million. Last month, it leased 14 logistics assets to Amazon in the US.
For the third quarter of 2021, the investment bank more than doubled its net profit on an annual basis, underpinned by a strong performance in the group’s business lines.
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