An Islamic giant awakes
Cityscape Abu Dhabi turns spotlight on Islamic real estate finance - the growing phenomenon sweeping the world
Islamic real estate financing is a sleeping giant about to awaken with international multi-billion dollar deals set to make new records in 2008, according to leading finance industry watchers.
The burgeoning economies of the Gulf Co-operation Council (GCC) along with Asia Pacific are the driving forces says Irina Awote, Director of the Real Estate Finance and Investment Conference which will be held alongside the second Cityscape Abu Dhabi – the International Real Estate and Investment Event – from 13 to 15 May 2008.
One of the main areas of growth is expected to be in Islamic real estate investment trusts, according to the ratings agency Moody's Investors Service. "Given the phenomenal property boom in these markets, Islamic real estate investment trusts are a much needed product and a useful investment tool," says Faisal Hijazi, a Moody's analyst.
"Moreover, the potential for growth is aided by the tremendous concentration of high net worth individuals and family businesses whose collective wealth in the GCC alone is estimated at over US$1.3 trillion."
The global demand for Islamic real estate comes under the spotlight at the Cityscape Abu Dhabi Real Estate Finance and Investment conference, which takes place at the Abu Dhabi National Exhibition Centre. There will also be a special pre-conference workshop on 12 May on structuring Islamic real estate deals.
"Real estate products have been a major part of the growing Islamic finance market which has increased by 15% in each of the past three years," Awote said. "This has been partly as a result of the increased wealth in Islamic countries, which in turn was driven by high oil prices. Analysts see little sign of a major slow down."
Sukuk, or Islamic bonds, are the fastest growing sector of the market – with many issues property related. Global Sukuk volume reached in excess of US$97 billion last year, mostly in the Arabian Gulf and Malaysia. Sukuk issues in real estate made up 25% of that total. Moody's anticipates that overall Sukuk issuance will increase by 30-35% in 2008.
"In addition, real estate firms like Dubai's Nakheel and Abu Dhabi's Aldar Properties are already among the leading Sukuk providers in the world," Awote said. Just last month a US$1 billion Sukuk was listed on the Bahrain Stock Exchange by Saudi real estate company Dar Al Arkan. The Sukuk has also been listed on the Dubai International Exchange and Malaysia's offshore Labuan International Financial Exchange.
To complement the focus on investment, the Cityscape Real Estate Awards which has a total of 16 award categories, includes two dedicated to finance - Best Islamic Real Estate Finance Award and Most Innovative Finance Award. The deadline for entries and nominations is 13 April 2008.
Platinum sponsors of Cityscape Abu Dhabi include Mubadala, Aldar Properties, Sorouh, Escan, The Land Holding Company and Al Qudra Real Estate. Dubai World Central, Tameer and Saudi Oger have taken Gold sponsorship and the Silver sponsors are Future Brand and East & West Properties. Associate Sponsor is the Department of Municipal Affairs of Abu Dhabi and Strategic Planning Sponsor is the Urban Planning with HSBC as Investment Sponsor. Cityscape Abu Dhabi is also endorsed by the Emirates Green Buildings Council.
For more details about Cityscape Abu Dhabi, please visit: www.cityscapeabudhabi.com
