First Sharia-Compliant Asian REIT Launched

By Editorial 07 March, 2014

The World's first Sharia-compliant Asian Real Estate Investment Trust (REIT) has been launched by Bahrain's Al Salam Bank.

The REIT, named Al Salam Asia REIT Fund, will invest with a diverse portfolio of between 15 to 35 properties. Each position will be equally-weighted, rebalanced, and reviewed as part of the risk management process, the bank said.

Al Salam Bank will be the sponsor and seed investor for the fund and it will be managed by B&I Capital AG, a Swiss asset management firm which focuses on Asian markets.

A REIT is a listed real estate investment trust that enjoys tax privileges and allows investors to have access to multi-class real estate properties.

Deputy CEO of Al Salam Bank, Anwar Khalifa Al Sada, said that the goal of the fund is to give investors a long-term, superior risk-adjusted total return through a combination of high, stable, and growing dividends as well as a significant opportunity for capital appreciation.

"The Fund aims to deliver benefits of diversified real estate ownership in Asia while avoiding many of the pitfalls of holding physical property and real estate developer equities," Al Sada said.

"Historically, REITs have lower volatility, superior returns and low correlation compared to equities and can provide some hedge against inflation", Mr Talal Abdul Aziz Al Mulla, Head of Investment at Al Salam Bank, said. "The strong demographics and growth potential in Asia have resulted in Asian REITs providing a return of 12 percent higher than developed country REITs over the last 10 years. We believe that Al Salam Asia REIT Fund will provide an optimum investment solution for accessing the growing Asian real estate market [with] a diversified and a Sharia-compliant approach."

Christian Bernasconi, Managing Partner for B&I Capital, said: "We believe Asian REIT risk-adjusted returns will continue to be superior to other asset classes. Demographics and growth combined with pro-REIT regulation in many Asian countries will continue to support the demand for products like [Al Salam Asia REIT Fund.]"

Tags: Tax | Investment | Real-estate Investment | Real-estate | Bahrain | Dividends | Regulation | Inflation | Expats | Investment | Invest | Investment |


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