NBF extends Dh208m loan to GRDI for construction of Ikea centre in Dubai

National Bank of Fujairah (NBF) has concluded a facility valued at Dh208 million for Gulf Resources Development & Investment (GRDI) for the construction of Ikea's largest distribution centre in the Middle East at Dubai South.

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.

In 2011, NBF granted GRDI a medium-term loan valued at Dh280 million to acquire a parcel of land at Emaar Square in Downtown Dubai 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.