IslamicFinance.de

Bahrain-based Gulf Finance House (GFH) has announced the signing of two development agreements for real estate development in India. The flagship investment of GFH in India is the Energy City and Mumbai IT & Telecom City (India Project) developments in New Mumbai, the agreement of which was signed with Wadhwa Group. The second agreement was agreed with Adani Infrastructure & Developers , to explore development opportunities in relation to various infrastructure and real estate projects in India. Adani Infrastructure & Developers will be partnering with Asiastar City Holdings to develop the Phase 2 of GFH’s India Project.

Bahrain’s Al Salam Bank has launched a listed sharia-compliant real estate investment trust (REIT) that will invest in a portfolio of Asian properties. The REIT will invest in between 15 and 35 properties and be managed by Swiss-based B&I Capital AG, with Al Salam providing seed capital for the fund. The Islamic lender did not reveal the expected size of the fund. Al Salam was an anchor investor in the Sabana Industrial REIT, which was listed on the Singapore exchange in 2010 and was one of the world’s first REITs to adopt Islamic principles. A handful of Islamic REITs have been launched, including Dubai Islamic Bank’s Emirates REIT in 2010. Malaysia now has three listed Islamic REITs.

Gulf Finance House (GFH) has announced the signing of two development agreements for real estate development in India. The flagship investment of GFH in India is the Energy City and Mumbai IT & Telecom City (India Project) developments in New Mumbai. The agreement was signed with Wadhwa Group. According to this agreement, GFH and Wadhwa have agreed to the appointment of Hafeez Contractor to be the master planner for the Phase 1 of the India Project, with an expected end sale value of USD 4 billion. The second agreement was agreed with Adani Infrastructure & Developers.They intend to work together to explore development opportunities in relation to various infrastructure and real estate projects in India. Adani Infrastructure & Developers will be partnering with Asiastar City Holdings to develop the Phase 2 of GFH's India Project.

NCB Capital has joined hands with Jeddah-based SEDCO Development Company to launch the AlAhli SEDCO Residential Development Fund, a public close-end Shariah-compliant investment opportunity. The fund provides investors with capital growth by purchasing land plots in Jeddah for development, construction and sale of residential apartments targeting the middle income segment of the population. Minimum subscription is SR50,000 and the fund aims to have an internal rate of return of 10 percent per year. The new fund has been created to address the shortage of reasonably affordable residential accommodation for middle and upper income home buyers.

For many years we see in the media experts believing in inflation and even hyper inflation. However, in the same time we face proponents warning against deflation. So far we all noticed.

Only a about a week ago I read an article by Myret Zaki clarifying that unfortunately inflation and deflation co-exists.

Myret Zaki's thesis is that we face inflation on financial markets, and deflation in the real economy (in French):

http://www.bilan.ch/myret-zaki/redaction-bilan/inflation-et-deflation-co...

In my view there is a general major shift in the price matrix and I still try to figure the magnitude and implications thereof. It is a bit irritating as at University we learned about neutrality of money:

http://en.wikipedia.org/wiki/Neutrality_of_money

This means any extra supply will increase prices equally, 5 % more money, all prices going up 5 %. Pretty plausible at first hand. However, it seems it does not work in reality any more (or never did).

Nakheel plans to prepay in 2014 more than half of its bank debt of AED6.8 billion, originally due for repayment in September 2015. The company will pay AED2.35 billion in Q1 2014, and plans an additional prepayment of approximately AED1.65 billion in Q3 2014. Moreover, Nakheel plans to make additional payments of AED3 billion by Q3 2015. Other amounts will be paid ahead of the due dates. The trade creditor sukuk, due in August 2016, will be paid on time. The company says that a robust financial performance that has significantly exceeded its revised business plan, has led to improvements of approximately AED22 billion to date over the plan period. Over the past 28 months, since the successful completion of the financial restructuring, Nakheel has continued its focus on delivering the revised business plan and creating a long term sustainable business. Besides, Nakheel also launched new development projects to revive its core business activity of property development.

GFH Capital, a fully owned subsidiary of Bahrain based Gulf Finance House, has completed the acquisition of a prime central London residential property. Located in Kensington, the property is a Grade II listed building, overlooking the Queens Gate Gardens. This investment is in line with GFH Capital's strategy to identify attractive opportunities in developed markets like the UK, where it has already made considerable investments. Demand for this type of property is coming from investors all over the world. GFH Capital expects this dynamic to continue due to the favorable conditions of London. However, the firm also sees value and upside potential in other real estate markets such as the US and expects to make additional investments in these markets as well.

Property developer Sigma Capital Group has formed a 700 million pound ($1.14 billion) joint venture with Shariah-compliant Gatehouse Bank for the development of up to 6,600 new rental homes in Britain. The joint venture will initially invest 200 million pounds (approximately $326 million) in the construction of 2,000 residences in Liverpool and Salford in northwest England. Under the terms of the agreement, Gatehouse will deliver the equity element of the venture. Britain aims to address its imbalance of housing supply and demand by providing loans for the purchase of homes and by financing a 1 billion pound (about $1.6 billion) Build-to-Rent fund to encourage investment into rental housing.

London-based Gatehouse Bank plans to build 6,600 rental homes and gain from the shortage in decent housing stock. The bank hopes to gain from the big shift in the country’s housing market away from buying to renting. Gatehouse has formed a joint venture with the property developer Sigma Capital to leap into the sector. Initially they will build 2,000 new homes in Liverpool and Salford at a cost of about £200m before going on, if the venture proves a success, to build a further 4,600 properties with a further £500m investment. If successful, it would overtake Britain’s biggest stock market-quoted landlord, Grainger Trust, which has currently got 4,000 homes. Gatehouse already has a £1bn property portfolio across the UK and US.

Dear Reader,

IslamicFinance.de is still edited by myself, Michael Saleh Gassner. In the same time the website became part of the family's publishing house, Al Kitab.

Myself I moved to Geneva for professional reasons, working as Islamic private banker. IslamicFinance.de remains to be a private passion.

Best regards,

Michael Gassner

Azzad Asset Management has announced the launch of a series of estate planning seminars across the United States aimed at helping congregants at mosques and Islamic centers create inheritance plans that comply with both U.S. and Islamic law. It is the 1st Islamically compliant waqf model consistent with U.S. law. The Azzad estate planning seminars began in early September in the Southeastern United States. As part of those sessions, certified financial planners explain the fundamentals of Islamic inheritance law, the importance of wills, and the implications of bequests—in addition to the role each plays in conjunction with a family endowment.

Kuwait Finance House (KFH) in collaboration with Kuveyt Turk (KFH Turkey) has launched a new Turkish real estate financing service. This service provides KFH customers with an end-to-end solution to their Turkish real estate requirements, tailored to their specific needs. It will support them searching for properties in Turkey, providing assistance on negotiation of an acquisition price, competitive Islamic real estate financing and offering post-sales services, should investors need to manage the properties in their absence. A specialized section has been established by KFH in Kuwait City, in order to support customers purchasing real estate in Turkey. This office acts as a contact point and provides customers with the relevant administrative services related to Turkish real estate, like document gathering and handling, information distribution and logistics handling.

The Bahrain-based investment firm Tadhamon Capital acquired two assets within its prevalent Social Infrastructure Platform in the United Kingdom in the second quarter of 2013. The two transactions are valued at approximately £32 million (US$50 million) which brings the total value of the assets held under the Platform to £123 million (US$190 million). The first transaction was established between Tadhamon Capital and Maria Mallaband Care Group Ltd (MMCG) to forward fund the development of the £6.7 million 53-bed care homes in Gerrards Cross, Buckinghamshire (west of London). The second transaction builds on the Platform's existing strategic relation with McLaren Properties by arranging the acquisition of 251-bed Brunswick House student accommodation scheme in Cambridge at a value of £26 million.

Venture Capital Bank successfully secured the acquisition of a prime boutique new-build freehold residential development in Mayfair Chambers, one of London's most eminent residential districts.. This investment opportunity comprises of a building currently being developed to house six luxurious residences. Construction of the development has commenced and delivery of the apartments is expected to be in April 2014. VCBank has been working on this development and investment opportunity for several months. The Bank has engaged Trowers & Hamlins - an international law firm- to conduct a full legal due diligence on the site and offer advice given the new changes in the tax regime addressing matters such as stamp duty land taxes, capital gain taxes, and annual tax on enveloped dwellings (ATED).

Saudi Fransi Capital has launched its new fund, the Saudi Fransi Real Estate Fund. The new fund seeks to achieve capital growth, by developing lands and real estate projects, along with the possibility of generating income stream by acquiring existing real estate in Saudi Arabia. It's a closed -- ended Shariah-compliant fund, with duration of four years from the day of closing, but may be extended for two successive periods of one year. The subscription period started on May 18 and will end on July 3. SFC signed a memorandum of understanding with a leading and renowned real estate developer, to be the principal real estate developer of the fund; the fund may assign other developers if needed. Yasir bin Othman Al-Rumayyan, CEO of SFC, said that the fund provides the opportunity for capital growth and generating income; since it generates cash during the development phase.

London-based Gatehouse Bank plc (Gatehouse) has announced that its associate has successfully completed the sale of a real estate investment located in San Francisco's South Financial District in California. The total amount of the sale reached $71m (£46.4m), which yielded a profit on equity of 100% post costs and taxes. This real estate investment consists of two office buildings situated on a 15,306 sq ft parcel of land and is adjacent to the proposed Transbay Redevelopment Project. Gatehouse Bank and its associate were assisted by Arch Street Capital Advisors, L.L.C. and SKS Investments in this transaction.

Al Salam Bank-Bahrain has successfully completed and sold a joint venture comprising seventy three villas worth an estimated gross development value of RM260.6 million ($86m), in one of Malaysia's Penang Island's largest seafront residential developments. The venture, Martinique Villas By-the-Sea, was named as the Best Villa Development in Malaysia at the South East Asia Property Awards 2011. Successful completion of this project was a result of a tripartite venture involving Al Salam Bank-Bahrain, Eastern & Oriental and CIMB-Mapletree Management Sdn, who entered into the agreement in 2006. The successful collaboration was celebrated at a private event in Penang.

KLCC Property Holdings (KLCCP) expects its KLCCP Stapled Group, the first shariah-compliant stapled real estate investment trust (REIT), to become one of the largest property groups in Asia with a market capitalisation of RM12 billion. Chief Executive Officer Hashim Wahir said the KLCC REIT will house three properties - Petronas Twin Towers, Menara 3 Petronas and Menara ExxonMobil. The stapled REIT which is the KLCCP shares and KLCC REIT unit will be stapled and will be traded as one security on the Bursa Securities. Upon completion of the restructuring, KLCCP shareholders will own shares and units in KLCCP and KLCC REIT respectively.

According to Ernst & Young’s report ‘The growing crisis of affordable housing in MENA,’ regional governments need to engage the private sector to help address the growing crisis of affordable housing. Housing affordability lies at the intersection of supply side (more homes) and demand side (more financing), and to tackle the growing crisis, MENA governments need to engage the private sector on both sides simultaneously. Cities will not create quality affordable housing if the task is left purely to the private market. It is vital that MENA governments take charge of land allocation and make sure that some urban land is reserved for that purpose.

After years of giving away land to citizens, the Saudi Arabian government is left with almost no space of its own to develop in urban areas. That will delay building as the government chooses between buying back city plots whose price has been inflated by speculation or paying a premium to build in the desert. Saudi authorities plan to address the lack of available urban land as part of a national housing strategy that includes measures to combat land speculation and incentives to build. To meet its affordable housing needs, Saudi Arabia must either build in the desert or force urban landowners to develop their empty lots.