DIB links up with HK house to exploit Asian real estate
Dhs1.65 billion Islamic fund put together to tap into the booming Chinese property mart
The world’s first Islamic bank, Dubai Islamic Bank, has said that it has formed a partnership with Hong Kong-based conglomerate Cheung Kong group, to offer Islamic investors access to Asia’s property markets through the Al Islami Far Eastern Real Estate Fund.
The new fund will be managed by ARA Asset Management and jointly promoted by DIB and Cheung Kong Group. The Islamic-compliant investment vehicle has set aside Dhs1.65 billion (US $450 million) to invest in commercial, retail and residential projects in major Asian cities such as Beijing, Shanghai, Hong Kong, Singapore, Kuala Lumpur and Seoul. “Currently, Asia is the most exciting market with China as the growth engine. After the financial crisis of the late 1990s the economies of many Asian cities are recovering strongly. With China providing the main stimulus, these economies are poised to benefit from continuing investment into the region,” says Aref Kooheji, DIB executive vice-president of investment banking.
“We have teamed up with one of Asia’s largest developers, Cheung Kong Group, for this fund. Islamic funds have not been active in Asian real estate – we believe this one provides the basis for us to expand our investments into this region. We are bringing new and diverse investment opportunities to our investor base in the Middle East. This partnership with Cheung Kong Group is just the first step towards a long-term relationship,” he added.
Justin Chiu, Cheung Kong (Holdings) executive director, said: “We are very pleased to partner DIB in this fund, which we believe is among the first of its kind in Asia. DIB is a leading Islamic banking institution and we are very happy to facilitate its investment programme in Asia. Going forward, we expect to see more opportunities of a similar nature.”
Moinuddin Malim, DIB vice-president of Asset Management, pointed out that DIB is excited about this fund, which will invest in a portfolio of assets in the Asian real estate market that have good potential for capital appreciation. DIB has worked with ARA to create a Sharia-compliant structure and is one of the cornerstone investors alongside Cheung Kong Group.
John Lim, ARA Asset Management managing director, stated that: “We are very pleased to be appointed portfolio manager of the fund and are confident of delivering good returns to investors. ARA is thrilled to be working with the two large investors by bringing their competitive advantages together to create this fund.”