Monday, April 20, 2015

Shariah investors look to the UK’s student housing sector


Islamic Finance news Alert

Monday, 20th April 2015

S&P 500 Shariah
Dow Jones Islamic World
MSCI World Islamic
FTSE Shariah All World
Russell - IdealRatings Islamic Global
1,825.78
2,973.73
1,189.01
2,103.81
1,928.14
-21.49 ( -1.16%)
-30.02 ( -1.00%)
( -0.83%)
-18.10 ( -0.85%)
-17.71 ( -0.91%)

HIGHLIGHTS: Tadhamon Capital announces South London investment – Arab Monetary Fund and World Bank collaborate on Islamic finance among others – Luxembourg keen to explore Islamic finance opportunities with Oman



Daily Cover


GLOBAL: The student accommodation sector in the UK continues to gain traction as a preferred asset class among Shariah investors as the segment continues to pose attractive dividend yield levels and lucrative capital gains buoyed by an undersupply of such properties in the market. One of these Islamic investors is Bahrain’s Tadhamon Capital which has been investing in the UK real estate market since 2009, but has made student accommodation a key focus in its investment strategy. From the recent sale of its first Central London student accommodation investment, the firm has managed to achieve over 70% in return to investors over a period of less than three years; following which it has committed itself to another UK student property investment.

The Central London property – Paris Garden – was acquired by the firm as part of the Tadhamon Capital & Apache Capital Partners’s managed Social Infrastructure Investment Platform which currently boasts gross assets under management (AUM) of over GBP350 million (US$520.7 million). Generating a stable net 8% income for investors since 2013, the exit from the project realized an internal rate of return (IRR) of over 25%, exceeding initial expected return of 16.5% IRR.

While Central London remains an extremely attractive investment area, investors are also looking to Greater London locations. Following the sale of its Central London property, Tadhamon Capital is now keen to tap the South London market and has entered a joint venture arrangement to develop a new student accommodation at the center of Kingston-Upon-Thames. Valued in excess of GBP45 million (US$66.95 million), the 210-studio room development is expected to realize over 15% IRR over a five-year investment period.

Hesham Al Gassab, the executive director of investment at the firm, affirmed in a statement that student accommodation will be a core focus for its Social Infrastructure Investment Platform whose AUM the firm plans to grow to over GBP500 million (US$743.85 million) over the next year.

The UK aside, Tadhamon Capital also has its eyes set on other markets. “We have a strong pipeline of transactions which we are evaluating and look to build our current portfolio assets across the GCC, the UK and Turkey whilst also looking to expand into the US market and potentially parts of MENA region,” revealed CEO Ahmed Sultan.



Brazil: An IFN Correspondent Report


Brazil continues efforts to attract foreign investment
As mentioned in previous reports, the efforts being made by the federal government to foster the Brazilian economic growth, to fight inflation and, at the same time, to avoid recession, have been major and all these despite some political difficulties that the federal government is currently facing in implementing actions to cut expenses and, at the same time, to increase its revenues.

IFN Weekly Poll


Can large international ‘non-Muslim’ conventional banks still play a role in Islamic retail banking?
On the back of the industry’s gradually increasing market share, IFN this week asks market constituents if international ‘non-Muslim’ conventional banks can or perhaps should still play a role in Islamic retail banking. NABILAH ANNUAR reports.

This week's poll question: With Russia developing and promoting its Islamic finance capabilities, would you consider investing in Shariah compliant products in Russia while sanctions are in place?







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