ADIB Arranges Structured Islamic Financing Deal For London Property

Abu Dhabi Islamic Bank (ADIB), a top-tier Islamic financial services institution, has arranged a GBP 20 million structured Islamic financing transaction to fund the development of Westbourne House, a prime 1980’s commercial property in Central London combining office and retail space.

The deal marks ADIB’s debut in London’s real estate market at a time when the British government is promoting the city as a centre for Islamic finance. British Prime Minister David Cameron told a gathering of political and business leaders on Tuesday that he wanted London to “stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world”.

ADIB’s financing package for Westbourne House was specifically tailored to meet the investors’ aims of acquiring, refurbishing and reselling high-value luxury properties to overseas buyers. Responding to the growing demand for real estate in central London, a consortium of GCC investors purchased the property in 2012 with the aim of converting it into luxury residential apartments within a period of 3 years.

ADIB is responding to the increasingly supportive regulatory environment being established in the UK to encourage the further growth of Islamic Finance, and is keen to develop its UK business by providing real estate investors with new alternatives for funding.

Commenting on the transaction, Arif Usmani, Global Head of Wholesale Banking at ADIB, said: “ADIB welcomes the increasingly high profile role being played by the UK’s Financial Services sector to encourage the global acceptance and growth of Islamic Finance products and services.  Resilient demand from international buyers for prime residential real estate has underpinned the performance of  London’s property market which has outpaced most other markets in recent years,  ADIB appreciates the value of building strategic partnerships with investors in international markets, which enable us to extend our global reach and to identify similar opportunities in London  and other key international locations for our clients.”

ADIB opened its office at One Hyde Park in London in May 2012 to serve its clients from the UAE whose interests are increasingly international, and who often choose London as their base for business and personal transactions, including home finance and investments. It was the first UAE-based bank providing Islamic financial services to be licensed to operate in the UK, and is one of the only 5 of these that are fully Sharia compliant.  Banks in the UK have thus far issued 37 sukuk (Sharia compliant bonds) raising $30 billion (Dh110 billion), all of which are listed on the London Stock Exchange. One of these was the world’s first hybrid perpetual sukuk which was issued by ADIB in 2012.

Source: Press Release