Further Middle Eastern investment in UK commercial market

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by Lin Freestone

Taking advantage of the fall in the UK property market, Gulf Finance House, an Islamic investment bank based in Bahrain, is launching its second Shariah-compliant UK commercial property fund.

It is understood that the bank has identified buying opportunities in the UK market, which will have to be approved by Gulf Finance House’s Shariahcommittee to ensure that purchases comply with Islamic financing laws.

The fund will be managed by the head of real estate fund management at Gulf Finance House, Nick Judd. As a former director of Knight Frank, he is well placed to provide strategic advice about the opportunities in the UK market.

Known as Gulf Atlantic Real Estate II, the fund is expected to have more than £300m to invest in the UK. The bank’s first fund finished in 2005.

Established 1999 in Bahrain, Gulf Finance House is one of the most respected Islamic investment banks in the Middle East region in its quality and innovation of product offering. The bank has a paid-up capital of $65m and an authorised capital of $50m.

Middle Eastern investors are becoming increasingly interested in the UK property market. They are investing in commercial property with good tenants on long leases.

Incoming-producing properties can be currently acquired at prices well below their fair value and are seen as low risk investments to institutions and wealthy individuals in Gulf Co-operation Council states.