Sudan's Al Salam Bank offers First Property Fund for subscription

The move is aimed at opening up investment opportunity in Sudan's real estate sector.

The fund is a unique mechanism for individual and corporate investors seeking to achieve medium term capital growth through investment in the Sudanese real estate sector in accordance with the Sharia complaint lease system of "Ijara".

Minimum subscription has been pegged at US$5,000, which has a projected annual leasing dividend of 7%. Initial public offering (IPO) of the fund will start on September 1, 2007 for individuals and corporate bodies in Sudan and all Gulf states. The fund will last for four calendar years beginning from the date of closing the subscription and ending on the date of issuing its liquidation notice, but the duration is extendable to a maximum additional period of one calendar year.

The fund's transactions, including investments and units, will be in US dollars but subscriptions by clients can be in any other major international currencies or in the Sudan Dinar (SD) as per the current exchange rate at the time of subscribing for shares at the Al Salam Bank. Those who want to convert their monies into currencies other than those acceptable to the fund will bear the risk of currency fluctuation of those currencies at the time of the conversion, the bank warned.

Commenting of the IPO, Mohammed Ali Al Abbar, Board Chairman of Al Salam Bank, said: "The bank decided to set up the Al Salam First Property Fund to provide for its clients investment opportunities in the Sudanese real estate market. With a capital of US$60 million, the fund is being managed by the bank itself in its capacity as the employee, while investors play the role of employer in a Sharia-compliant transaction that is based on the principle of "Ijara" (employment)".

Al Abbar added: "The Al Salam First Property Fund is a closed-fund with independent financial status. It has been limited to a certain period and capital that can not be increased. Investors can not claim for refund during the period of its existence but can sell their shares to any interested buyer in a transaction where the Al Salam Bank, being the fund's manager, will document the share transfer transactions according to the laid down rules and regulations of the fund."

Also commenting on the fund, Mr. Hussein Mohammed Al Meeza, Al Salam Bank's Deputy Board Chairman and Managing Director, said: "The Al Salam First Property Fund is a great investment opportunity for individuals and corporate investors, who want to achieve capital growth in a medium-term investment venture in the Sudanese real estate market. This opportunity has been boosted by the current economic boom in Sudan and the high demand for properties in the country. It provides a low-risk business opportunity with appropriate dividend. In addition, this investment, which is based on buying, selling or renting of property, is Sharia-friendly and very profitable in view of the current boom on the real estate market."

Mr. Al Meeza cited the economic situation in Sudan today. He said the Sudanese economy, which achieved a remarkable growth of 9.3% last year is expected to achieve a tremendous growth of about 13% this year, according to Sudan Central Bank projection, adding that the growth was boosted by revenue from the high oil prices and the start of production by a number of new oil fields.

He also cited the 2006 Council of Arab Economic Unity report which says that Sudan's economy had achieved a remarkable growth last year, placing second after Saudi Arabia in attracting investment in the Arab region. This is in addition to the 3% appreciation of the Sudanese Pound against the US dollar and 8% appreciation in purchasing power. He said the increase in oil and non-oil revenue had contributed immensely in achieving financial surplus in the past few years, adding that the current economic boom in Sudan makes investment in the country very feasible.

The Al Salam First Property Fund has lined up a number of real estate projects including the Al Sinad Properties, Presidential Villas, Saria Properties, Yasmeen Residence and many others.