Saudi Arabia is a hotspot for investment, says Investcorp’s Hazem Ben-Gacem

DAVOS: Pent-up consumer, logistics and industrial demand in Saudi Arabia have caught the eye of some of the world’s biggest businesses, including the Bahrain-based equity firm Investcorp as it considers a $1 billion investment.

Speaking on the sidelines of the World Economic Forum in Davos, co-CEO Hazem Ben-Gacem told Arab News that the firm’s experience in the West had given it the know-how to venture into the Gulf, an area it has called home for 40 years.

Ben-Gacem said that his company’s expansion in the GCC would be the first step to reaching $1 billion of investments in the real estate market over the next few years. 

He said the focus was on Saudi Arabia as the company looks to capitalize on the country’s booming logistics sector. 

Investcorp has bought a temperature-controlled warehouse in Dammam. It is the first of $100 million-worth of real estate investments that it is already assessing in the Kingdom. 

Ben-Gacem said the company was aiming to become one of the largest owners of refrigerated warehouses in the Gulf.

“Just like the sector, the macro-momentum in the Gulf, and that is very much driving a lot of the need for the logistics trade,” said Ben-Gacem.

“We see a couple of pent-up demands, particularly in the trading routes, from Oman to Bahrain, Qatar, and the Kingdom. 

He said Investcorp’s targets would “not be your classic commercial properties or residential. It will very much be in a more infrastructure-esque type of property. So anything from warehouse, logistics, transport hubs, individual locations for customs, and what have you.

“So momentum will continue for a while. We’ve already identified another $80 million of opportunities between Bahrain and Oman in the logistics space, which we’ll be announcing in the next few months.”

When Saudi Arabia’s Crown Prince Mohammed bin Salman announced the Kingdom’s Vision 2030 plan in 2016, skeptics were doubtful about how a nation dependent on oil for several decades could diversify its economy successfully.

Ben-Gacem said that he saw that as an opportunity, adding that historically the Gulf has been an exporter of capital, but today a lot of that is being reinvested locally and making an impact on the economy. 

The firm has also been expanding in Southeast Asia with initiatives in countries including Indonesia, India, China and Singapore. “Glimpses of positive momentum” were clear, he said, “in Asia, Southeast Asia, India, (and) more and more (in) China.”

“We feel we steered the ship in a way which will offer investors attractive areas in attractive economies in the next decade or so.”

Davos is an annual meeting where world leaders, economists and billionaires gather to discuss topics such as global politics, economics and social issues.