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A shari’a real estate fund in Paris, courtesy of an anonymous Kuwaiti bank, has all the trappings of a queer yet interesting partnership in a market with fair potential.
July 13, 2012 4:30 by kippreport
A Kuwaiti bank ties up with a French asset management company specializing in real estate to set up a real estate fund. A rare occurrence, but hardly a unique one. Add the word shari’a to it and the event becomes even more singular. And then keep the name of one of the partners, the Kuwaiti bank, in this case, a secret and it becomes particularly unique. This is exactly what has happened with Paris-based La Française’s first shari’a-compliant fund, which is also being claimed as the first of its kind in France.
Launched on March 23 this year, the fund has been introduced as a structured OPCI – collective real estate vehicle with simplified investment rules with leverage – dedicated to institutional investors, including an unnamed but one of the largest and leading Islamic corporate and investment banks in the world, based in Kuwait.
The Kuwaiti bank prefers not to disclose its name as “most of its global investment activities are done in low profile.” The fund is the chosen vehicle to lodge the office building located 91, boulevard Saint Michel, Paris 5e, purchased jointly with the Kuwaiti bank. “The office building is leased to France Telecom, with a 10-year contract. The building was sold by Foncière des Régions for roughly EUR46 million. The acquisition was partially leveraged by way of a Murabaha loan (a Shari’a-compliant loan facility structure that is primarily comprised of principal plus a fixed-profit margin) with non-interest bearing outlay,” the company said in a statement recently.
Since 2010, La Française AM and the unnamed Islamic investment bank have been linked by a joint venture partnership for the sourcing and asset management of Shari’a-compliant core real estate projects in France. Apparently, the Islamic bank considers the French market key to its global investment allocation and has decided to team up with “a local, high caliber and experienced French partner” – La Française AM – “to implement its proficient investment strategy”.
La Française AM is a multi-specialist asset manager with two core areas of expertise – securities and real estate. Its assets under management, as of the end of last year, totaled EUR34.8 billion. It has more than 35 years’ experience in collective real estate vehicles. It develops tax optimized solutions for accessing institutional real estate vehicles domiciled in France, specifically for foreign investors.
The group also offers partnership agreements (joint ventures) for the selection and investment in French sustainable or shari’a-compliant real estate property. La Française Real Estate Managers is the leading French unlisted real estate fund manager in terms of capitalization. It boasts of being active at every stage of the real estate chain, from research and product engineering to asset management.
Conspicuous by its absence, the international real estate department manager of the invisible Kuwaiti Islamic bank has instead sent a quote for the media to digest and infer. “We are delighted to carry out our first partnership with well-known local player, La Française AM. This investment represents the cornerstone for our future investments in French real estate. Our choice naturally settled on La Française AM, given their extensive and successful track record, as well as the financial solidity of their group.
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