Canadian investment giant Brookfield Asset Management has announced plans to expand into the logistics real estate sector in the Middle East through the acquisition of a controlling stake in Dubai-based Gulf Islamic Investments’ (GII) logistics platform. In a move that signals growing interest from global investors in the high-potential logistics industry, Brookfield will look to leverage its extensive expertise and capital to scale up GII’s existing portfolio of assets.
Brookfield, which manages over $900 billion in assets globally, said the acquisition of the majority stake in GII’s platform marked its entry into the logistics real estate space in the region. However, financial details of the transaction were not disclosed. Established in 1995, GII is a Sharia-compliant alternative investment company with a diverse portfolio valued at over $4.5 billion across various sectors including healthcare, education and logistics real estate.
With over $5 billion already invested in the Middle East market, Brookfield is no stranger to the region. It owns and operates several major commercial properties in key markets like Dubai, including the iconic ICD Brookfield Place business hub. Jad Ellawn, Brookfield’s Managing Partner and Head of Middle East, commented that given the continued growth in e-commerce and consumption, the logistics sector presented many “exciting opportunities” where the company could leverage its expertise.
Dubai emerges as regional logistics hub
The acquisition comes at an opportune time as Dubai has aggressively pushed its ambitions to become the preeminent logistics and trade center in the Middle East and North Africa region. Strategically located at the crossroads of Europe, Asia and Africa, Dubai has invested billions of dollars in the past decade to expand port, airport and road infrastructure. This has enabled it to attract global logistics giants seeking to establish regional hubs.
Dubai is now the busiest port in the MENA region with a massive capacity to handle millions of shipping containers annually. Home to three free zones focused on logistics – Dubai Logistics City, Dubai South and Dubai Trade Centre Authority (Tradex) – the emirate has emerged as a re-export powerhouse. A growing number of global e-commerce giants like Amazon and Alibaba also have logistics centers and warehouses in Dubai to serve the Gulf and wider MENA markets.
The pandemic-induced surge in e-commerce and online shopping has further accelerated Dubai’s push to position itself as a preeminent logistics hub. According to a recent report, the regional third-party logistics market is projected to grow at a compound annual rate of 5.6% until 2026, reaching $55 billion. No doubt, this potential has attracted major investors like Brookfield who see opportunities to capitalize on Dubai’s strategic advantages.
Brookfield’s expansion plans and outlook
With its acquisition of GII’s platform, Brookfield plans to actively acquire and develop high-quality logistics real estate assets across the region. It will look to expand GII’s existing portfolio which includes logistics facilities, warehouses and distribution centers. According to Ellawn, there are “exciting opportunities” to provide solutions to partners in the Middle East by leveraging Brookfield’s global expertise.
The Canadian investment firm has a strong track record of developing and operating major real estate projects around the world. It will utilize its extensive experience and capital muscle to scale up GII’s platform over the long run. This includes pursuing development opportunities arising from Dubai’s growing inventory of logistics and industrial land and facilities. Brookfield may also explore acquisitions of logistics assets in other GCC markets like Saudi Arabia which are rapidly enhancing infrastructure.
With e-commerce on a secular rise, underpinned by the region’s young, digital native population – demand for modern, large-scale logistics facilities is expected to grow exponentially. This makes the sector highly attractive for long-term investments. By acquiring a controlling stake in GII’s platform, Brookfield is well-positioned to capitalize on the lucrative opportunities emerging across the regional logistics landscape in the coming years. Its entry could also attract other major global players to this high-potential real estate slice.
In conclusion, Brookfield’s acquisition of GII’s logistics platform signals growing interest from institutional investors in Dubai and the Middle East’s rapidly expanding logistics sector. Leveraging the emirate’s strategic location and infrastructure investments, the firm aims to scale up a high-quality portfolio of assets to tap rising demand from e-commerce and trade. Dubai’s ambitions to become a global logistics hub also make the sector an exciting long-term bet for Brookfield to capitalize on the emirate’s ascendancy.
