Emirates bank and belgravia move in on the uae property market
Emirates Islamic Bank has teamed up with Belgravia Asset Management to launch the first Shariah-compliant property fund that will invest in the residential and commercial real estate markets of the UAE.
The product will launch with $65m of proprietary capital. The initial focus for the fund is to invest into the Dubai, Abu Dhabi and Sharjah real estate markets, specifically the low to mid-priced residential market and quality office buildings.
Initially, it is hoped the fund will attract the interest of HNWIs but a retail version that has a lower minimum investment is planned for the future.
There has been demand for this type of property following the increase in Asian workers to the region. This employment inflow has been largely from the low to middle income workers. These people are creating strong demand for the residential rental market. Population growth is increasing at a steady rate of more than 8% per annum.
Commercial real estate investment is also performing very well. More than 140 of the top 500 global companies have a presence in the UAE attracted by the country's growing international importance as a financial centre. Demand for top quality office space exceeds supply and rents are on the rise. There is supply under construction to ease this demand, however rents are low in comparison to other financial centres and rents are expected to appreciate in the short to medium term for well located prime offices.
Ebrahim Fayez Al Shamsi, chief executive officer of Emirates Islamic Bank, said: "Not only is this the first local property fund, but also the first Shariah-compliant property fund to be launched in the UAE.
"The success of residential and commercial developments over the last three years has boasted the popularity of this asset class amongst investors in the Middle East. With the continued growth of the UAE and the region, both property rental income and capital growth should continue to flourish. By setting up this fund, we offer the retail investor an opportunity to invest in this growing asset class and be part of the spectacular development of the UAE."
Minimum Investment: $100,000, with monthly subscriptions and redemptions, $25,000 retail fund also hoped to be launched.
Charges: Annual Management Charge 1.5%, Initial charge up to 5%.
Where available: Through intermediaries open to all investors except for US and Canada, also distributed through Emirates bank.
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