June 24, 2014 – Arzan Wealth (DIFC) Limited (‘Arzan Wealth’), a Dubai-based advisory firm regulated by the Dubai Financial Services Authority, is pleased to announce that it has advised a consortium of investors on the forward purchase of a German warehouse (under construction) for use as a spare parts storage and distribution center by Volkswagen AG (“VW Property”). A conditional contract to acquire the VW Property was signed on 23 June 2014
The Property is currently under construction and Practical Completion (“PC”) is due for 1 August 2014, at which time the tenant will occupy the 104,830m2 of storage space / open area and 480m2 of office space, which sit on a 158,000m2 site. After the expiration of a short rent-free period, the consortium of investors will acquire the VW Property in December 2014 and start receiving the projected investment returns.
The Property is leased entirely to Rudolph Automotive Logistik GmbH (“Rudolph”), a large international logistics company which is contracted by VW to store and distribute spare parts for all of VW’s brands. The lease has a term of 10 years, with a tenant extension option for up to a further 11 years upon expiry. While Rudolph is the tenant and operator of the logistics operations, VW guarantees the payment of the rent via a sub-lease arrangement between Rudolph and VW.
Arzan Wealth acted as the Strategic Advisor on the structuring and acquisition of the VW Property, in joint venture with the Property Advisor, 90 North Real Estate Partners (“90 North”). The consortium of investors that have committed to acquire the VW Property includes Al Tijaria (“The Commercial Real Estate Company”), Arzan Financial Group and other prominent international investors.
Muhannad Abulhasan, CEO of Arzan Wealth said:
“Building on our success in the UK property market, this German transaction pushes Arzan Wealth’s activities into another major global market, in response to the requirements of our advisory clients. This acquisition reinforces our primary strategy of seeking safety and a secure income stream for our clients, in various established major markets around the world .Arzan Wealth, along with our strategic partner, 90 North, will continue to ensure prudent risk management and attractive financial results are delivered to our valued clients.”
Consistent with past transactions that Arzan Wealth has advised on, this acquisition is expected to provide a secure monthly income stream, equating to 8.25% per annum, which is a highly attractive return profile when compared with typical yields from VW 10 year bonds.
Notes to Editors
Arzan Wealth (DIFC) Limited
Arzan Wealth is an investment advisory firm registered at the Dubai International Financial Center (DIFC), and is regulated by the Dubai Financial Services Authority (DFSA). Arzan Wealth currently advises various clients on real estate, private equity and other investments worth a total of approximately USD750mn. Arzan Wealth focuses on arranging yielding investments in major global markets, as well as bespoke investments that meet the requirements of specific clients.
90 North Real Estate Partners LLP
90 North is an independent investment advisory firm based in London, specialising in ethical and Shari’ah compliant real estate investment. Co-Founder Partners are Philip Churchill and Nicholas Judd, with former BBC Dragons’ Den James Caan as Chairman of the business. The Founder Partners combine substantial property and other transactional experience, excellent track records with an absolute focus on property fundamentals to deliver superior risk adjusted returns and protect and enhance wealth.
In the past 2 years, 90 North has transacted on approximately £277,500,000 of real estate transactions in the UK and Europe, working in close partnership with Gulf based institutions.
90 North opened it US office in Chicago in June 2014.