Produced in partnership with K&L Gates LLP -
Real estate is an increasingly important asset class for Islamic-compliant transactions and banks in the UK. Islamic-compliant finance has proved to be an alternative source of funds entering the UK real estate market as witnessed by such high-profile London real estate deals as the Chelsea Barracks and the Shard.
Real estate as an asset class for Islamic finance and hybrid structures -
Islamic finance uses real estate as an investible, tangible asset class on which to base its financial structures. Since 2010 there has been a notable increase in the number of Islamic funds and Islamic banks providing mezzanine finance for real estate finance transactions.
In such structures:
- a conventional senior bank lends the majority of the debt on an interest payment basis
- the investors inject their equity, and
- the mezzanine finance tranche is put into the structure in an Islamic-compliant way This type of hybrid structure is a way of accessing finance from Islamic funds and Islamic banks.
Please see full article below for more information.
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