Islamic real estate deals set to grow

ABU DHABI: Islamic real estate financing is a sleeping giant about to awaken with international multi-billion dollar deals set to make new records this year, according to leading finance industry watchers.

The burgeoning economies of the GCC along with Asia Pacific are the driving forces says Real Estate Finance and Investment Conference director Irina Awote.

The conference will be held alongside the second Cityscape Abu Dhabi - the international real estate and investment event from May 13 to 15.

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," Moody's analyst Faisal Hijazi said.

"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 $1.3 trillion."

There will also be a special pre-conference workshop on May 12 on structuring Islamic real estate deals.

Global sukuk volume reached in excess of $97bn last year, mostly in the Gulf and Malaysia. Sukuk issues in real estate made up 25 per cent of that total.

Moody's anticipates that overall sukuk issuance will increase by 30-35pc this year.