DIB US Real Estate Fund achieved 21 per cent annualised return to investors

The two properties sold were part of a $121 million five-property portfolio put together by DIB. The bank launched the fund to investors in October 2003 and offered $30 million of its equity in units of $100,000. The offer was oversubscribed in record time. Aref Kooheji, Executive Vice President of DIB's Investment Banking Group, said: "DIB has always sought to provide its clients with Islamic investment opportunities that have a diversified nature and carries a good rate of return.

"Entering the US market was a calculated entry into a growing market. The success in the investment has exceeded our expectations, delivering an annualised 21 per cent return for the first eleven months. This is well beyond our earlier expectations of a 10.6 per cent annual rate."

The portfolio was made up of commercial real estate in the New Jersey and Kansas City, Missouri office market. The original investment holding period had been set at three to five years and the fund forecast a 7.4 per cent net annual cash-on-cash return, to be distributed half-yearly.

DIB's Asset Management Division had earlier identified the US and France as the pick of countries providing investment opportunities. This led it to create the US Commercial Property Fund and its Al Islami French Property Fund and DIB remains on the look out for further opportunities.

Moinuddin Malim, VP - Head of Asset Management in DIB, said: "We successfully launched the French Property fund last May with a Euros179 million portfolio of four high-quality, commercial properties in Paris. The total value of the equity offered to investors was Euros30 million with an expected annual return of 8 per cent. The investors subscribed to this fund which was closed in a record time of one week. This investor confidence is a true reflection of DIB's ability to offer quality Islamic Sharia-compliant products to meet the demand."