FINANCE & INVESTMENT

Julian Maynard, Managing Director, Maynard Design

PRESENTING THE RIGHT OPPORTUNITY

Manrre Logistics Fund’s Chief Executive Officer Kunal Lahori

shares his insights on industrial real estate investments and his vision for the company

The UAE retail eCommerce market reached a record USD3.9 billion in 2020, a 53% year-over-year increase driven by the COVID19-led digital shift. With this growth comes the significant requirement for last mile fulfilment centres and operational hubs; all of which require vast amounts of warehousing square footage.

Manrre Logistics Fund, a private Dubai-based investment company, entered the market in 2018 to capitalise on this and offers investors investment opportunities in industrial and logistics real estate.

Manrre focuses on institutionalgrade logistics and industrial properties in locations including Jafza, Dubai Investments Park and Dubai South, in addition to investments in the cloud, dark kitchen and alternative spaces in the UAE.

Strategic investments The company recently announced two strategic investments in Jebel Ali Free Zone (Jafza) increasing the value of its portfolio by 22.5% to USD71.3 million. The first of the investments in Jebel Ali is a facility leased to Infofort, a subsidiary of Iron Mountain, a company focused on records management, data backup and recovery, document management and data centres.

The second is AMS Integrated Solutions, a Danish company operating in nine countries specialising in fleet management, technical training, and logistical needs for mission readiness. Both new additions have fully guaranteed 10-year lease agreements in place.

Kunal Lahori explains how the fund works. “Manrre is the one of the few players in this niche space and presents investors with a unique opportunity for exposure to a growing class of regional assets. The fund has a threeyear track record and has delivered an annual ROI of 7.7% since inception which in comparison to other global real estate funds is on the higher end of the spectrum,” he says.

Commenting on the twin investments, Lahori says: “We are extremely proud of the new additions to our ever-growing investment portfolio. Both investments align with our strategy on long-term and stable income generation of logistics assets, with high exposure to the rapidly growing e-commerce market. This allows our investors to benefit from a higher-yield and a commitment to capital preservation.”

High yields There has been significant growth over the last ten years in Dubai’s industrial real estate sector. He adds: “We have seen a shift in demand which is more towards eFulfilment and distribution rather than other areas. Technology is being used more in the space along with a big focus on environmental, social, and governance (ESG) factors which includes LEED and solar as a priority, our new facilities will incor-

porate such sustainability features. For us, ESG is more than good intentions. It’s about creating a tangible, practical plan that achieves real results. It’s about embedding these principles - and more across our businesses - from investment to sustainable innovation.”

Lahori further notes: “If you look at the UAE market, the eCommerce sector currently accounts for about 8% compared to more mature markets like the US. This illustrates the significant growth opportunity ahead. We are confident that there is only an upside for the demand for the industrial real estate.”

Lahori is confident the future investment plans of the fund will continue to build on the successful investment strategy the firm has laid out. “When evaluating any further growth or expansion, our team is consistently evaluating them as per our strategy and investment criteria; right asset, right tenant, right industry, long-term growth viability,” he shares.

The company has plans to acquire real estate that is strategically integral to the success of the regional logistics sector and have a futuristic focus on technology such as data centres, cloud kitchens, dark stores.

“Manrre’s journey has just started, and we’re now looking to scale to the wider GCC market. Moving forward, we will continue to focus on expanding our footprint in a steady pace. In today’s inflationary environment, real estate investments provide potential recurring income for investors and can keep pace or exceed inflation in terms of recurring income and appreciation,” he notes.

Into the next phase To boost its position across the region, Manrre recently appointed CBRE as their evaluator and advisor for the next phase of growth of the fund. CBRE is the world’s largest commercial real estate services and investment company, with the leading global market position in leasing, property sales, outsourcing, property management and valuation.

“Since the inception of the fund, we have had a laser-focused commitment to this specific asset class and COVID-19 was a natural stress test on the portfolio. Having a solid strategy and working with the right partners has allowed us to weather the global macro-economic challenges and now focus on the continued growth of the fund,” adds Lahori.

This continued growth, drives increasing demand for logistics real estate, industrial warehouses, and fulfilment centres, all of which form the core of the Manrre Fund’s portfolio.

“Manrre’s journey has just started, and we’re now looking to scale to the wider GCC market. Moving forward, we will continue to focus on expanding our footprint in a steady pace.”