Canada’s Brookfield invests in UAE warehouse sector

Unsplash.com/Ruchindra Gunasekara

Canadian company Brookfield Asset Management has acquired a controlling stake in a portfolio of warehouses owned by the UAE’s Gulf Islamic Investments (GII), as it takes advantage of continuing growth in the region’s ecommerce sector.

The value of the deal was not given.

The portfolio includes 1.5 million square feet of high-quality warehouses across the UAE.  

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Due to increasing interconnectivity, the region is witnessing enhanced integration of Gulf economies, leading to a surge in demand for logistics assets, said GII co-founders and co-CEOs Mohammed Alhassan and Pankaj Gupta.

CRC (Commercial Real Estate Consultants), an affiliate of Dubai real estate conglomerate Betterhomes, reported in its 2023 report that it saw a 132 percent rise in the number of buyer leads in the warehouse sector in Dubai last year.

With demand high, real estate consultancy company CBRE said in a February report that at the end of 2023 average rental rates in the industrial and logistics sector rose 7 percent in Abu Dhabi and nearly 15 percent in Dubai.

Much of the increased demand for real estate in the warehouse and logistics sectors can be attributed to the rapid growth of the UAE ecommerce sector.

• UAE logistics boom demands more and better warehouses
• UAE ecommerce market forecast to reach $9.2bn by 2026
• Saudi warehousing shortage offers developers opportunity

A report by Mordor Intelligence valued the sector at nearly $9 billion in 2023 and predited it will nearly double in size by the end of the decade.

Brookfield and its partners already own and operate 3 million square feet of commercial real estate in the region, including ICD Brookfield Place in Dubai International Financial Centre. 

Dubai’s sovereign wealth fund Investment Corporation of Dubai and Brookfield last month sold a 49 percent stake in ICD Brookfield Place to Abu Dhabi alternative investment fund Lunate and Saudi Arabia-based Olayan.

The Canadian alternative investment company’s logistics portfolio spans over 80 million square feet across five continents. Globally, Brookfield has around $900 billion worth of assets under management.

GII manages more than $4.5 billion in assets and has been actively investing in logistics real estate since 2018. It is currently focusing on acquiring, repurposing and developing facilities for transport and ecommerce companies across the GCC.