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The fund utilises Ijara, a Sharia-compliant master leasehold, and offers semi-annual coupon payments with an anticipated yield of 8.25 per cent per annum. The Fatwa and Sharia Supervisory Board of DIB will oversee Sharia compliance.
The properties are located in a range of US markets and therefore offer geographical diversity. In addition, the areas in which the properties are located have positive demographic trends, strong daytime populations, moderate to strong average household incomes, strong anchor tenants and retail markets with a positive outlook for the future.
Saeed Al Qatami, Head of Wealth Management, DIB, said:
'On the heels of the launch of the DIB Water Note, the launch of the US Retail Real Estate Fund marks DIB's rapid development in the area of wealth management. The bank now offers a diversified menu of investment products that cater to all segments of our large and growing customer base.'
'We have utilised Investcorp as the investment manager for this fund as we have successfully worked with them on previous funds, and they have a very strong reputation in the real estate sector,' he added.
Al Qatami noted: 'We have launched similar real estate investment products in the past, and they have met with a very positive response. In keeping with our theme of diversified investment product offerings, this innovative investment product is another unique offering for our clients.'
Naveed Ahmad, Head of Investments, Wealth Management, DIB, said: 'We expect a strong response to this fund as it provides our customers with a complimentary investment to equity investment products, which focus on capital gains as opposed to income production.'
Examining the outlook for the fund, Ahmad said: 'This is an excellent fixed-income, Sharia-compliant investment vehicle. The fixed-income asset class within Islamic finance is limited, but sukuks and real estate investment products are two key vehicles that allow customers to attain regular profit payments outside their fixed deposits.'
He concluded: 'The US Retail Real Estate Fund enjoys a positive outlook for the future with the high occupancy rate of the properties, strong opportunities for rental growth and the support of an experienced property management team.'
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Posted by Anne-Birte Stensgaard, Senior News Editor
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