KFH & AmanahRaya Investment Bank set up Islamic real eatate fund

Posted on | July 16, 2007

By THE EDGE

KUALA LUMPUR: Kuwait Finance House (KFH) has inked a deal with Labuan-based AmanahRaya Investment Bank to jointly establish a US$200 million (RM690 million) Islamic Real Estate Fund that will invest in real estate related projects in the Asean region.

The fund, known as Al-Nibras and to be made available by next month, is targeted at high net worth retail investors from the Gulf Corporation Council and those from other countries.

The fund will invest in fully completed as well as uncompleted real estate projects in Malaysia, Singapore, Thailand and even China.

“This is a landmark transaction for us. It is the first alliance of its kind for us in Malaysia,” KFH chief exective officer K Salman Younis told reporters on July 13 after signing a memorandum of understanding with AmanahRaya Investment Bank.

Salman said a number of properties have been identified in Kuala Lumpur for the fund, but declined to disclose details. Roadshows are also being organised by the bank to market the fund to investors in the Middle East.

“We clearly see in Malaysia real estate is still undervalued when compared to neighbouring countries like Singapore, Thailand and Indonesia. There is still a big potential for real estate in Malaysia,” he added.

Salman said the time was right for Malaysia to tap the pool of funds from the cash-rich Gulf Corporation Council countries, while catching up with neighbouring countries that have stepped up their game in attracting investment from oil rich nations

AmanahRaya Investment Bank director Datuk Mohammed Azahari Kamil said the fund would augur well with AmanahRaya Berhad’s Real Estate Investment Trust (REIT) as uncompleted development projects under the Al-Nibras Fund could be groomed before being injected into AmanahRaya REIT when fully developed.

KFH and AmanahRaya Investment Bank will jointly undertake investment management roles of the fund, which will have a charter life of five years and extendable for two periods of one year each.

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