Islamic Banking

UK Regulated Bank Launches Shariah-Compliant Real Estate Fund

Stephen Harris, 12 December 2006

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European Islamic Investment Bank, the first independent Shariah-compliant Islamic investment bank to be regulated by the UK’s Financial Serv...

European Islamic Investment Bank, the first independent Shariah-compliant Islamic investment bank to be regulated by the UK’s Financial Services Authority, has launched a Shariah-compliant real estate fund.

The EIIB Pan-European Islamic Real Estate Fund is structured as a tax-efficient Shariah-compliant vehicle that will directly purchase commercial real estate assets in the office, retail and industrial sectors in and around major cities in the UK and Western, Central and Eastern Europe.

EIIB has appointed Knight Frank Investment Management as the property fund advisor, to source real estate deals and actively manage the properties.

The fund is closed-end with a fixed term of five years plus up to two years wind-down. With a target size of between €200 million ($391 million) to €500 million at launch, the fund may consider a listing on a stock exchange after the initial capital is deployed.

The fund's target return is 11 per cent IRR per annum net of fees and expenses, and will be targeting income of 7 per cent per annum net of fees and expenses.

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