NBF extends AED 208 million financing facility to GRDI for construction of IKEA's distribution centre at Dubai South
Bank was also responsible for bringing the construction firm into the project, underscoring its extensive expertise and network of contacts in the contracting sector
National Bank of Fujairah PJSC (NBF) announced today that it had concluded a facility valued at AED 208 million for Gulf Resources Development & Investment (GRDI), which went towards the construction of IKEA's largest distribution centre in the Middle East at Dubai South, the 145 square-kilometre master-planned city previously known as Dubai World Central (DWC). The Bank acted as the sole adviser and financier for the transaction.
The IKEA distribution centre is developed through a joint venture between GRDI, a real estate development and investment company providing property solutions for global firms across Europe, Africa, the Middle East and Asia Pacific, and Dubai South. It is the Swedish furniture group's first direct investment in the Middle East - IKEA stores across the region are managed by Al Futtaim Retail on a franchise basis - and will facilitate the faster and more efficient distribution of IKEA merchandise to its outlets across the GCC.
Located in the Logistics District at Dubai South, which is also home to the Al Maktoum International Airport and the World Expo 2020 site, the new IKEA facility has a built-up area of 1 million square feet - roughly the size of 16 football fields. It will be able to handle 50,000 twenty-foot equivalent containers (TEUs) per year upon commencing operations in November and increase its capacity to 70,000 TEUs within three years.
This is not NBF's first transaction with GRDI; in 2011, NBF granted the client a medium-term loan valued at AED 280 million to acquire a parcel of land at Emaar Square in Downtown Dubai on which to construct an 18-storey commercial building.
Utilising its industrial expertise and experience to add further value to the client, NBF also brought Amana Contracting & Steel Buildings into the transaction to complete the principal working team responsible for the IKEA project. The company is a leading regional contractor that delivers turnkey solutions for time-sensitive industrial and commercial large projects, and NBF also supported its financial requirements for the IKEA project.
Vikram Pradhan, NBF's Head of Corporate & Institutional Banking said that the transaction is further proof of the bank's unmatched relationship-driven approach: "NBF has made a name for itself as a bank that will go the distance to help clients succeed. In the case of GRDI, we were not only able to support them financially but leverage our knowledge and professional contacts within the procurement and contracting sector within the UAE to help them find a partner most suitable for the project. Such a dedicated customer-servicing approach ensures that we are constantly on the lookout for new ways to exceed customer expectations.
"We are pleased to be of part of this notable project and would like to congratulate GRDI on its successful completion."
Mohamed Salem Al Menhali, GRDI CEO said: "I would like to thank the NBF team for its support and trust in the successful development of one of the largest logistics distribution centres in the region. "As a key player in regional real estate development and investment, the IKEA distribution centre marks an important step in GRDI's long-term expansion plans within the UAE. We are delighted to have in NBF a strong and reliable partner that has supported us in some of our most recent and high-profile projects and look forward to the bank's partnership as we embark on the next lap of our growth journey."
About National Bank of Fujairah PJSC:
Incorporated in 1982, National Bank of Fujairah PJSC (NBF) is a full services corporate bank with strong corporate and commercial banking, treasury and trade finance expertise as well as an expanding suite of personal banking options and Shariah compliant services. Leveraging its deep banking experience and market insight within Fujairah and the UAE, NBF is well-positioned to build lasting relationships with its clients and help them achieve their business goals.
NBF's key shareholders include the Government of Fujairah, Easa Saleh Al Gurg LLC and Investment Corporation of Dubai. Rated Baa1 / Prime-2 for deposits and A3 for counterparty risk assessment by Moody's and BBB+ / A-2 by Standard & Poor's, both with a stable outlook, the bank is listed on the Abu Dhabi Securities Exchange under the symbol "NBF". It has a branch network of 15 across the UAE.
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