FRANCE - La Française AM launches the first OPCI sharia compliant in France

www.property-magazine.eu - La Française AM has created the first Sharia compliant OPCI (collective real estate vehicle with simplified investment rules with leverage) dedicated to institutional investors, including one of the largest and leading Islamic corporate and investment banks in the world, based in Kuwait.

The Kuwaiti bank prefers not to disclose its name as most of its global investment activities are done in low profile. The newly introduced Sharia compliant structured OPCI vehicle, considered the first of its kind in France, is the chosen vehicle to lodge the office building located 91, boulevard Saint Michel, Paris 5e. The building was purchased jointly with the Kuwaiti bank. The office building is leased to France Telecom, a leading telecommunications operator, within a 10-year lease contract. The building was sold by Foncière des Régions for roughly €46 Million. The acquisition was partially leveraged by way of a Murabaha loan (a Sharia compliant loan facility structure that is primarily comprised of principal plus a fixed profit margin) with non-interest bearing outlay. (source)

UK - Ethical Asset Manager Launches 'First Shariah-Compliant Investment Sukuk' for Muslim Investors

www.ibtimes.co.uk - Ethical Asset Management (EAM), a UK-based asset management firm that complies with Islamic Shariah law on finance, claims to have launched the world's "first true" investment sukuk (Islamic bond) for Muslims.

A multimillion equity-only investment fund will be raised in order to buy assets in Britain's booming student accommodation market as cities across the country struggle to meet the property needs of their university students.

The instrument will be called the Ethical AM UK Student Accommodation Investment Sukuk.  (source)

LUXEMBOURG - Structuring Islamic real estate investments through Luxembourg

www.kpmg.com - Real estate is the preferred asset class of many Islamic investors, and European located properties seem to be more and more in their focus.
For tax efficiency purposes, these investments are commonly structured through real estate investment vehicles established in a tax efficient jurisdiction such as Luxembourg. The present article provides an overview of real estate in Islamic asset management and the Luxembourg vehicles that may be used for such investments.

(rest of article in link)

UK - Tadhamon seals UK students facility dea

www.tradearabia.com - Tadhamon Capital, a Bahrain-based Islamic investment company, said it has reached an agreement with UK developer Watkin Jones for joint ownership of Athena Hall, a prime purpose built student accommodation block in London.

The Athena Hall was developed by Watkin Jones in 2010 and is part of a new university campus benefiting from a five-year rental guarantee across the whole property and a 30-year nomination agreement with University Campus Suffolk. (source)

UK - Gatehouse Bank seals $54.5m US property investment

arabtimes.com - Deal an example of turning crises into opportunities: Fahed Boodai 

KUWAIT CITY, Jan 9: Gatehouse Bank, a subsidiary of Securities House in Kuwait, announced Monday its successful delivery of a real estate realized investment in the sale of VA Oceanside Clinic, a medical facility near San Deigo, California, USA, for $54.5 million.
The announcement was made at a press conference by Chairman of Gatehouse Bank, Fahed Boodai. Talking to the media, Boodai said the property was purchased by Gatehouse in June 2010 for $44.8 million without any bank finance and sold in Dec 2011 for $54.5 million. (source)

UK - FINANCE - Islamic Bank of Britain launches Sharia compliant B2L mortgage alternative

mortgagestrategy.co.uk - Islamic Bank of Britain has entered the buy-to-let mortgage market with the launch of its Sharia compliant buy-to-let purchase plan.

Landlords of any faith looking for ethical and Sharia compliant finance can access IBB’s buy-to-let purchase plan with a deposit of only 25%.

To mark the launch IBB have also announced a promotional procuration fee of 0.5% gross, payable on referrals that drawdown prior to March 31 2012. (source)

UK - UK FIRM TO LAUNCH INVESTMENT SUKUK

MANAMA: British-based Sharia-compliant investment firm Solum Asset Management will launch the first "investment sukuk" in the first quarter of next year, treating Islamic bonds as investment vehicles rather than debt instruments, its chief executive said.

Unlike traditional sukuk, which are akin to conventional debt products, the £200 million ($310m) Student Accommodation Investment Sukuk will use equity to provide holders with an annual yield of four to six per cent, said Safdar Alam at the company's launch in Bahrain.  (source)

UK - FINANCE - Solum Asset Management eyes UK student accommodation

cpifinancial.net - Launched at the World Islamic Banking Conference, Solum Asset Management has unveiled plans for a Sukuk that will invest in income-producing student accommodation in the UK

Safdar Alam, Chief Executive Officer, Solum Asset Management

The firm plans to issue its UK Student Accommodation Sukuk in Q1 2012. Solum says it has identified and shall acquire existing income-producing assets. Value for money and rental affordability will be key tenets of the investment strategy, the firm said.

The UK student accommodation sector has performed well despite the downturn in the wider UK economy, commercial and residential property sectors. Structurally, there remains a long term shortage of purpose built housing for students in many cities and this, coupled with the low delivery of new private housing stock, has resulted in continued positive rental growth in many university towns and cities in the UK. (source)

UK - CAPITAL MARKETS - Shariah compliant real estate fund Londoncentralportfolio

londoncentralportfolio.com - Since the onset of market turbulence in October 2007, prime London residential property has outshone the stock market. UK FTSE 100 is down by about 20% whilst London Central prices are 15% above their pre-credit crunch high.

This is projected to continue due to the absence of new supply and an increasing appetite to invest in tangible assets, in a volatile economic and political environment. London Central's performance is notably correlated to the other safe haven investment, gold and is increasingly disconnected from the UK domestic housing market. The foreign investor can also benefit from the continuing weakness of sterling.  (source)

UK - Islamic property deals buck the trend in UK investment gloom

With stock markets the world over recording huge losses over the last week and the volatility in the markets set to continue due to the euro zone sovereign debt crisis, concerns over the down grading of the US credit rating and the weak US and EU growth figures, investors are pondering which asset class to seek refuge in. Do they place safe by moving their funds into cash or commodities such as gold, or do they stay put in bonds and equities, or go for investments in “bricks and mortar” property investments? (source)

UK - LCP unveils sharia-compliant London property fund

FTADVISOR.COM - Naomi Heaton, chief executive for LCP, said the London Central Apartments fund would appeal to some of the more wealthy clients, both domestic and overseas investors, who are looking to invest in property in the capital. (source)

EUROPE - European woe for SEREF

The place not to be if you were investing in a Shari’ah compliant Real Estate Investment Trust over the last few years was mainland Europe, as the $6.3m Solidarity European Real Estate fund aptly shows.

SEREF is a fund of funds that invests in other property funds as well as having the facility to invest directly in real estate. (source)

UK - QIB’s UK unit showcasing realty product in France

Buoyed by the response for its real estate mezzanine funding, QIB (UK) is showcasing the product at the annual MIPIM real estate conference that begins today in France. The product was introduced during 2010 and is focused upon the 60%-80% tranche within the capital stack. It allows QIB (UK), as an Islamic financier to co-exist with a conventional bank within the same financing structure whilst fully meeting Shariah requirements and guidelines. “I believe the real estate mezzanine product will enable investors to refinance upon satisfactory terms,” said Michael Clark, CEO of QIB (UK). (full story)

UK - UK's Gatehouse plans $97 mln sukuk by end Q1 - CEO

Feb 27 (Reuters) - Gatehouse Bank, a London-based sharia compliant investment bank, plans to bring a 60 million pound ($96.77 million) Islamic bond to market by the end of the first quarter, its chief executive said on Sunday. (full story)

SWEDEN - KFH considers investment in Scandinavian countries - Sweden key market: Al-Ghannam

Al Subeih seen with Swedish representatives and KFH employees.

KUWAIT CITY, Jan 26: AGM for Investment Sector at Kuwait Finance House (KFH) Abdul Nasser Al-Subeih said that the international partnerships that KFH establishes in the field of real estate investment is one of the main sources for revenues for KFH clients, and noted that the success achieved by Swedish real estate portfolio known as TRESAB three years ago, which is evident by its net profit KD 43 million. The deal was orchestrated by Leimdorfer Real Estate Company, under the supervision of KFH team that is specialized in international real estate.(source)

FRANCE - ISLAMIC FINANCE - most prominent mover 2010

Going over part of the archives, it became clear that France has been the most prominent mover during the year 2010 in the field of Islamic finance.  The review covers the span of the blog.

In July 2010 (just before the initiation of the blog), Norton Rose and DTZ Asset Management did publish the White Paper / Livre Blanc "Finance Islamique et Immobilier en France - comprendre pour agir" (French only) and this after DTZ AM had assisted between 2003-2008 with in all more than 40 transactions for more than 3 billion EURO.

Then there was intense focus on regulatory issues.

1. the French Sukuk-tax regulation published back in August, 2010 : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : les sukuk d’investissement et autres instruments financiers assimilés.
Les sukuk d’investissement sont ici des titres financiers hybrides négociables dont, comme pour les produits financiers assimilés, la rémunération et, le cas échéant, le capital, sont indexés sur la performance d’un ou plusieurs actifs sous-jacents détenus directement ou indirectement par l’émetteur";

2. the French Murabaha/Tawarruq-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à un des principaux outils de la finance islamique : l’opération de murabaha avec ordre d’achat, à laquelle s’ajoutent les opérations de tawarruq (opérations de financement réalisées au travers d’une opération de murabaha) et de dépôt rémunéré par une opération de murabaha.
La murabaha avec ordre d’achat est ici un contrat de financement aux termes duquel un client demande explicitement à un Financier de financer l’achat d’un actif déterminé ou d’un portefeuille d’actifs déterminés, en réalisant en particulier deux transferts successifs de propriété se présentant de la manière suivante : un vendeur vend l’actif à un Financier qui le revend à un Client moyennant un prix payable à tempérament, supérieur au prix d’acquisition à hauteur d’un Profit";

3. the French Ijara-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : le contrat d’ijara sur actif.
L’ijara considéré ici est un contrat aux termes duquel une entité met un bien à disposition d’un client pendant une durée déterminée, en contrepartie du versement de loyers. Ce contrat peut être assorti d’une promesse de vente ou d’une option d’achat"; and

4.the French Istisna-tax regulation of the same date : "La présente instruction a pour objet de préciser le régime fiscal applicable à l’un des principaux outils de la finance islamique : le contrat d’istisna.
L’istisna est un contrat de financement par lequel un Financier, finance pour son compte propre ou pour le compte de son Client, la construction d’un ouvrage mobilier ou immobilier auprès d’un tiers qui le construit (« le Fabricant »). Le Financier paie le Fabricant au comptant ou avec un échéancier durant la phase de construction."

As an interesting follow up on the Norton Rose / DTZ AM publication, there was the article in November 2010 of Wharton "Finding a Home for Islamic Finance in France : arabic" that not only gave a resume of the French position up to that time, but also placed the apparent tension between France and the UK in its' historical perspective from the 1980's onwards (original post) .

An MOU with Malaysian INCEIF aimed at the development for education in the field was entered into in October 2010 and the Guide and Position on the Issuance of Sukuk from the French Financial Markets Authority AMF was published in November 2010. (the English version can be dowloaded HERE).  In December 2010, the AAOIFI approved the "model" for French sukuk, which first French Sukuk in turn is supposed to be issued early 2011.

BNP Paribas was nominated the "Best Islamic Bank - France"by the IFN Islamic Finance News Poll 2010.

The perhaps most remarked academic contribution was "Diversification bancaire, performance, éthique : Alternative ou complémentarité ? Cas des banques islamiques." by Dr. Mohamed Ali CHATTI.

Stumbling upon these texts whilst reviewing part of the archive, I thought it was worthwhile to remind you.

For more details just click "FRANCE" in the country-list of the blog.

Hereunder is a short list of the most relevant tax regulations that changed in France in 2010 (original post) :

RUSSIA - Barwa Real Estate, Gazprombank announce closing of Russia fund

Doha/ Moscow: Barwa Real Estate Company QSC and Gazprombank OJSC (an affiliate of the world’s largest gas producer and exporter Gazprom) jointly announced yesterday the first closing of the Shariah compliant, Barwa Gazprombank Russia Real Estate Fund. The Fund represents the first collaboration between Barwa and Gazprombank and the two companies will seed the Fund with $75m capital each. The First Investor QSCC (TFI), a wholly-owned subsidiary of Barwa Bank, will contribute $2m into the Fund.

UK - GATEHOUSE BANK - Gatehouse completes acquisition of InterContinental Hotels Global HQ - Total acquisitions top 160 mln pounds

LONDON, Nov 1: Gatehouse Bank plc (Gatehouse), a wholesale Shariah compliant investment bank in the City of London, recorded another successful property acquisition with the completion of the £32.65 million acquisition of the InterContinental Hotels Group Global Headquarters in Denham, Greater London, UK; to bring Gatehouse’s total property acquisition value to more than £160million. 

UK - Islamic bank buys Brookes housing block

AN ISLAMIC investment bank which has its headquarters in oil-rich Kuwait, has snapped up a student accommodation block in Cowley for £28.95m.

The new building, on the former Territorial Army site at Slade Park, is built around a central courtyard and contains 350 en-suite rooms in apartments with independent kitchens and sitting areas, as well as 24 self-contained studios.