Abu Dhabi Islamic Bank (ADIB) UK, a wholly-owned subsidiary of Abu Dhabi Islamic Bank – a leading financial institution, has closed a commercial financing transaction for the acquisition of a Travelodge Hotel, located at London’s Heathrow Airport. The property was acquired by a Saudi based client for £40.3 million (AED 194.6 million), with ADIB providing £26 million (AED125.7 million) of Sharia’a-compliant financing.
The hotel is leased to Travelodge Hotels Limited, the UK’s second largest hotel brand, with 20 years remaining on the lease. The hotel is reportedly one of the best performing in Travelodge’s portfolio and is exceptionally well placed to benefit from the decision to proceed with the new runway at Heathrow. The hotel was developed in 2007 and comprises six floors, offering a total of 297 hotel rooms.
Paul Maisfield, Head of Real Estate at ADIB UK, said: “We are seeing a rise in demand for UK commercial property from the Middle East, specifically the GCC. The ADIB UK team holds the expertise needed to ensure a smooth and successful transaction, in addition to providing competitive Sharia’a-compliant financing solutions. We are pleased to have supported this client complete a transaction which fulfilled their specific requirements.”
ADIB UK’s team works with clients to provide packages and advice tailored to customer needs, whether it is financing residential or commercial properties. Earlier this year, ADIB arranged structured Islamic financing transactions to fund the acquisition of two office buildings at Lateral House, Leeds, for AED 118.3 million (£24 million), on behalf of a private Abu Dhabi based client, in addition to The Hub, located at the Aztec West Business Park, Bristol, for AED 159.4 million (£32.3 million) on behalf of a private Saudi-based client.
In 2017, investment volumes across the UK’s ‘Big 6’ regional office markets (Manchester, Birmingham, Edinburgh, Glasgow, Leeds and Bristol) were the highest for over a decade. Data released by JLL shows that office investment volumes in the Big 6 hit AED 14.3 billion (£2.9 billion) in 2017, 49% up on 2016. Manchester led the way for the year as a whole, with volumes of AED 4.5 billion (£908 million) which accounted for 30% of overall activity. Birmingham was the second most active market with AED 3.8 billion (£762 million) transacted.
ADIB opened its office at One Hyde Park in London in May 2012 and was the first UAE-based bank providing Islamic financial services to be licensed to operate in the UK. Today, it is just one of six banks in the UK providing Sharia-compliant services.