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GLOBAL:
Switzerland-based B&I Capital has partnered with IdealRatings to
provide investment solutions for asset owners seeking to tap into
Shariah compliant listed REIT companies.
The
amalgamation demonstrates both companies’ commitment to the Islamic
finance industry by creating a new investment sector into Islamic
REITs. This was a difficult area a few years ago as fund managers were
unable to identify the non-permissible income from the tenants in the
REITs due to data issues and an acceptable financial modeling by
Shariah scholars for non-permissible income.
With
this solution Shariah compliant investors are now able to have
equities, Sukuk and REITs in their overall investment portfolio which
is 70% of the investment quadrant, with the final quadrant on
commodities.
In
a statement to Islamic Finance news,
Mohammad Donia, CEO of IdealRatings, said: “B&I Capital will be
able to use the IdealRatings solution for their data on the listed
REITs and the non-permissible income for their selection of the REITs
universe. The front and mid-office solution provides a market level information
for the fund manager decisions to buy/sell/hold their investments.”
Donia
added: “We foresee a huge growth of the Shariah compliant REITs
investment globally since it is now possible to have an exposure in
this sector which was not possible a few years ago. Instead of buying a
property and managing the property to deliver the returns, investors
are finding REITs an easier vehicle to have an exposure into the
property sector and annual getting annual dividend returns.”
Echoing
the same sentiments, Christian Bernasconi, the managing director of
B&I, expounded: “By utilizing IdealRating’s team of analysts to
help us with Shariah compliance screening we are able to focus on what
we do best: fundamental analysis, stock selection and portfolio
construction. Without this partnership we would have to employ
additional analysts to cover the entire universe in Asia.”
B&I
will begin managing the Al Salam REITs Fund that has an exposure to a
selected number of countries in Asia – a region which has risen in
prominence in the last few years, as Middle Eastern investors show
keenness to diversify their investments and gain exposure to this asset
class and Asia itself.
Given
that the IdealRatings screening solutions are also able to screen for
global Islamic REITs, the exposure can be further extended to Global
REITs. By means of a Shariah rulebook, IdealRatings is able to provide
96 global Shariah compliant REIT companies from the combined US,
European and APAC markets which additionally provides a broad regional
diversification of REIT exposure.
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