Bahrain Property Fund commencing operation

Mr. Aabed Al Zeera, Chief Executive Officer (Acting) of the International Investment Bank and a member of BPF Board of Directors, stated that "subscriptions in the fund exceeded the BD10 million (USD26.5) that was initially set as the target subscription amount for the Fund. The Fund Administrator and Registrar, Ernst & Young, is currently preparing the final reports on subscriptions and taking all the necessary steps to issue subscription certificates to investors."

Mr. Al Zeera added that "IIB acting as the Fund Manager and Sponsor is currently finalizing the formalities with different professional parties associated with the organizational structure of the fund, such as the Property Manager and the independent Property Valuators. The Fund Manager is very keen on involving highly reputable and well experienced professional parties in order to achieve the highest degree of efficiency and profitability." Mr. Al Zeera also declared that "on the other hand, the Fund Manager has commenced BPF's acquisition program by acquiring the Manama Plaza and Manama Oasis complexes in central Manama. These properties comprise a balanced mixture of commercial and residential outlets with occupancy rate of 100%. In addition, the Fund acquired a newly constructed commercial property in the Seef District, which is custom-built for a corporate tenant. These selective acquisitions evidently reflect the investment parameters, mechanism, and strategies based on which BPF puts together the composition of its property portfolio."

Mr. Salah Nooruddin, IIB's Chief Operating Officer, and a member of BPF Board of Directors, also reiterated that "the Fund Manager through the commanding professional expertise of the BPF Property Manager would seek to improve the return on some of the acquired properties through a hands-on property management approach. The focus of this active management style would be on improving rates of occupancy, optimization of operational costs, property rehabilitation and lease reviews".

Mr. Nooruddin also added that "the investment vehicle designed for the Fund and its institutional format was a source of comfort for many investors, especially the ones with moderate income or low investment capacity, who sought a regulated access to the real estate market in Bahrain. The over-subscription in the Fund was a direct result of the positive perception among Bahraini and GCC investors, including expatriates, towards the concept of the Fund and the efficient mechanism it provides to enrich and institutionalize investment opportunities in the property sector in the Kingdom of Bahrain".

Bahrain Property Fund is the first real estate fund which has obtained BMA approval for listing in Bahrain Stock Exchange. The Fund has a tenor of 5 years extendable by two further periods of one year at the discretion of the Fund Manger. The Fund is expected to distribute an estimated annual cash dividend of between 7% to 8.5% to be paid on a quarterly basis to the Unit holders. The cash flow of the Fund will be generated from rental income of BPF's property portfolio. The Sponsor of the Fund, International Investment Bank, is one of the newest Islamic financial institutions in Bahrain. It was established as an Islamic investment bank in October 2003 in the Kingdom of Bahrain with a paid up capital of US$43Million (authorized capital of US$200 Million). The Bank's list of shareholders comprises a group of elite GCC high net worth individuals and some of region's prominent business houses. IIB's core business evolves around private equity investment, regional and international real estate investment, and corporate finance services in the Middle East.