London, U.K – The Arab Banking Corporation’s UK subsidiary ABCIB Islamic Asset Management Limited (“IAM”) and Kuwait-based GSH (Global Securities House) announced the successful sale of the assets of the jointly-sponsored Al Bait UK Real Estate Fund for £58.8 million.
The Al Bait Fund’s portfolio of properties comprised a balance of office, mixed use and industrial assets in diversified locations in UK. Acquired in 2003, the portfolio has been sold to the Pan-European Islamic Real Estate Fund. The early exit has generated profits significantly in excess of targeted returns. The Al Bait Fund’s (annual) internal rate of return on distribution is approximately 15%, equivalent to a gross return on invested equity of around 50%, beating original investment targets by a large margin.
Fahed Boodai, CEO of GSH stated, “We are thrilled by the results of the Al Bait UK Real Estate Fund which exceeds our expectations. This result reflects our objective of selecting exceptional investment opportunities for our clients. The results are due to the extensive due diligence we undertook as well as the hard work, expertise, and innovative thinking of the investment teams involved.”
Derek Weist, Acting CEO of IAM, a wholly-owned subsidiary of ABC International Bank plc commented: “The key to implementing successful strategies in real estate markets is timing. We believe that the time is now right for us to bring on added-value opportunities in other markets and sectors in which ABC is able to analyse and price risk.
“It has been a pleasure to work with the highly professional team at GSH,” he added, “and we are looking forward to building on this partnership with further international real estate offerings in the future.”
About the parties involved
Notes to Editors
Arab Banking Corporation (“ABC”) is a consortium bank owned by Kuwait, Abu Dhabi and Libyan government agencies. It was founded in 1980 and is headquartered in Manama in Bahrain. The Group has a well-established international network including offices in Paris, Milan, Frankfurt, London and, of course, the Arab world. ABC Group is one of the largest banks in the Arab world with assets totalling around US$22.4billion at 31 December 2006. The Group announced net profits of US$202m for 2006.
ABC International Bank plc is a wholly-owned subsidiary of ABC and is incorporated in the UK and regulated by the FSA. It was established in 1991, and is the main hub outside the Gulf for the Group’s Islamic banking and finance activities.
ABCIB Islamic Asset Management Limited is a wholly owned subsidiary of ABC International Bank plc, London and is staffed by employees dedicated solely to Islamic banking and finance. The primary responsibility of this team is the origination and management of transactions and assets which comply with Shariah and in this it works closely with ABC Islamic Bank, Bahrain.
GSH is an international real estate investment advisory firm based in Kuwait. It structures, manages, and monitors global real estate products on behalf of its investors. GSH has extensive experience in real estate investments in the US, UK, and France. GSH is a subsidiary of Securities House Kuwait, a publicly traded company in Kuwait.
Islamic banking is a faith-based system of financial management, which derives its principles from the Shariah, which is the Islamic canon law being derived from three sources - the Quran (the revealed Muslim holy book); the Hadith (the sayings of the Prophet Mohammed); and the Sunnah (the practices and traditions of the Prophet Mohammed). The Shariah proscribes Muslims from giving and receiving interest (riba in Arabic); using gharar (deception or ignorance in transactions through non-disclosure or non-availability of the full facts relevant to any part or the whole transaction); and investment in a range of prohibited activities including casinos, gambling, pornography, breweries, pork production and distribution.