Deal worth approximately 61 mln sterling pounds
KUWAIT CITY, April 2: KAMCO Investment Company, a leading investment company with one of the largest AUMs in the region, acquires Amazon’ UK Services Ltd’s largest distribution warehouse for approximately 61 million sterling pounds. KAMCO announced that the acquired property is leased to Amazon UK Services Ltd. on a triple net lease with an unexpired term of 15 years expiring on October 2031.
Through this acquisition, KAMCO has become the sole owner of the property. KAMCO aims to achieve a targeted cash yield of 6.50 percent per annum, at an expected IRR of 7 percent per annum during the investment period. Commenting on the acquisition, Faisal Sarkhou, Chief Executive Officer of KAMCO, said, “This achievement marks yet another step towards reaching our strategic objectives and future vision to enhance our operational performance and expand our real estate investments platform on a regional and international scale, in a way that is beneficial to our shareholders.”
On the subject, KAMCO’s Chief Investment Officer, Khaled Fouad said, “This transaction highlights the acquisition of a new category of income-generating assets that are leased to Amazon, in aim of diversifying sources of income.” He added that, “Reaching a target of half a billion dollars is not far-off especially that KAMCO’s alternative investment team currently manages more than $250 million in real estate across 11 regional and international properties.”
Fouad reiterated that the successful completion of the acquisition would have not been possible without the combined efforts of commendable advisers led by Rasmala Investment Bank as the investment advisor, Savillis Commercial Property Manager as the real estate and survey manager, Trowels & Hamlins, UK with Burness Paull (Scotland) as legal advisers. In addition to Ocorian as the offshore legal adviser (Jersey) & offshore administrator (Jersey), DekaBank Deutche Girozentrale as the main debt financier, the Office of JLL as the buy side broker, and finally Ernst & Young as the primary tax advisers.
Property Overview The Property acquired by KAMCO is ideally located in Dunfermline, Scotland, where the proximity of the warehouse lies 15 minutes away from Edinburgh’s Waverly Central Railway Station. As one of Amazon’s primary distribution hubs in the UK, the Property is used to store and deliver a wide range of general merchandise. Amazon employs 2,100 staff in the subject asset who work on a 22.5 hour shift cycle. Of the 143 million packages that amazon handles per annum, around 38 percent of these are handled in this center.
Amazon.com, Inc (NASDAQ: AMZN), the Fortune 500 company based in Seattle, has been assigned an ‘AA-’ credit rating by Standard & Poor’s (S&P), whilst its subsidiary, Amazon UK Services LTD has a 5A1 Dun and Bradstreet (D&B) rating, the highest on the scale of UK credit ratings. It is worth noting that the Property was purpose-built for Amazon’s services due to its strategic location and close proximity to the main transport networks, Edinburgh and Edinburgh Airport, which offers easy access to neighboring Scottish cities. The Property, which extends over an area of more than one million square feet, is fully automated with conveyor belts moving packages from the order receipt to fulfilment to packaging and finally the loading bays. The warehouse also features a 24-hour security system.