AMLAK launches Islamic real estate fund

Fund will provide comprehensive exposure to Dubai’s property market - estimated annual 6% rate of return.

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By  Mark Johnson Published  January 31, 2005

Islamic finance house, AMLAK Finance, has launched its first property-based fund, called the AMLAK First Real Estate Fund, which will focus on investing in Dubai’s real estate market under the Islamic Shariah rules of Ijarah. AMLAK said the fund was designed to appeal to all investors looking for capital growth within acceptable risk parameters, and has a minimum subscription of just US$25,000. The fund, which will be valued at US$75 million when fully subscribed, will be a closed-ended Fund, the company said. Investors will be able to apply for a stake in the fund from 1 February 2005, although it will remain open for a month. Morover, the fund will also be promoted to investors in Bahrain on 1 February 2005. AMLAK ceo, Mohammed Ali Al Hashimi, said: “We are proud to launch and manage the AMLAK First Real Estate Fund which will allow investors to get their foot onto Dubai’s property ladder. The Fund will, importantly, allow investors to spread their exposure to wide variety of properties currently leased by AMLAK. He added that the fund would make an ideal vehicle for individuals or corporate investors who wanted to achieve medium term capital growth through investment in the Emirate’s robust real estate sector. The term of the Fund will be for three years, with a minimum projected Ijarah rate of return of six per cent. “The launch of this Fund is testament to our confidence in the strength of the real estate sector in Dubai. There has been strong interest in property acquisition by individuals and corporations, and this has been fuelled by Dubai’s vision to become the commercial and tourist hub for the region. We expect this upward trend to continue well into the future,” Al Hashimi continued. Commenting on the relatively small size of the fund, Hashimi said that AMLAK viewed this as a first step into a new fund area and that it would help them test the market's responsiveness to such funds. Although he would not be drawn into specifics, he added that more Islamic products of this type were in the AMLAK pipeline.

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