First Islamic Investment Bank (FIIB) has formed a joint venture with Shurgard Self-Storage SCA to develop up to 38 self-storage facilities in the United Kingdom, France, the Netherlands, Denmark, Sweden and Germany. The transaction is valued at approximately 232 million euros ($265 million).
Shurgard Europe is the largest developer, owner and operator of self-storage facilities in Europe. First Islamic and its co-investors will hold an 80 percent interest in the joint venture, with Shurgard Europe holding the remaining 20 percent. Of the 38 sites targeted for acquisition over the next 12 months, to date 23 have been identified and approved for development.
The joint venture has agreed terms with Sociėtė Gėnėrale for the provision of a development financing facility for 65 percent of the total development cost. First Islamic projects that the investment will generate an Internal Rate of Return of approximately 20.7 percent over the anticipated four-year investment holding period.
First Islamic’s Chief Executive Officer Atif Abdulmalik said “We believe that Europe, with its large and dense population, offers significant opportunities for developing self-storage facilities. Although the population of Europe is significantly larger than the US, Europe presently has only 415 self-storage facilities compared to 35,000 in the United States.”
Mohamed Nooruddin, executive director of Investment Placement, added “Due to the fact that self-storage is a convenient and need-based product that has a relatively small cost impact on the customer’s pocket, historically, the self-storage sector has performed well even during economic slowdowns.”
FIIB, a Bahrain-based investment bank, was established in 1997. Today, with a paid-in share capital of $112.5 million and over 100 shareholders, First Islamic’s mission is to provide innovative, Shari’ah compliant investment banking products to institutional and individual investors internationally.
Shurgard Europe is headquartered in Brussels, with offices in Antwerp, The Hague, Stockholm, Paris and London. The company’s principal shareholder is Shurgard Storage Centers, Inc., the fourth largest company in the US self-storage sector with 455 stores, and the second largest in terms of equity market capitalization (approximately $1.1 billion). — (menareport.com)
© 2003 Mena Report (www.menareport.com)
