Sharia compliant financing of commercial real estate


In This Issue:

- Sharia compliant financing of commercial real estate

- Introduction

- Real estate as an asset class

- Sharia compliance issues that particularly affect commercial real estate finance

- Riba

- Prohibited business activities

- Joint ventures

- Leasing

- The application of real estate finance structures in sukuk

- Asset-based versus asset-backed structures

- Asset-backed structures: Securitisation

- Asset-based structures: Sukuk

- Negotiability of instruments

- The Sukuk al Ijara

- The Sukuk al Wakala

- The Sukuk al Istisna

- The Sukuk al Murabaha

- The Sukuk al Musharaka

- The Sukuk al Mudaraba

- Combining conventional and Sharia compliant finance

- Combination achieved by separation

- Asset separation

- Structural separation

- Security and intercreditor arrangements

- Control of cash flow or formal subordination

- Are priority arrangements needed?

- Formal intercreditor deeds

- Excerpt from "Sharia compliant financing of commercial real estate":

Introduction -

Real estate has been an increasingly important asset class for Islamic compliant transactions and banks. Islamic compliant finance has proved to be an alternative source of funds entering the European real estate market.

Originally published in PLC Finance.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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