Islamic Real Estate Finance Conference concludes today

The awards ceremony was held as part of the Islamic Real Estate Finance Forum (IREF) that took place on December 18 and 19, 2005. As part of the Outstanding Contribution Awards, the Best Finance Award went to Mr. Essam Janahi, CEO of Gulf Finance House; Best Developer Award to Mohamed AlAbbar, Chairman Emaar Properties; Best Investment Award to Prince Alwaleed bin Talal bin AbdulAziz Alsaud; Best Entrepreneur Award to Majid Al Futtaim, and Majid Al Futtaim Group of Companies.

As for the UAE Awards, the Best Finance House Award went to Kerzner International and Istithmar; Best Islamic Finance House went to Amlak; Best Developer Award to Emaar Properties; Best Residential Developer to Emaar Properties; Best Retail Developer to Mall of the Emirates; Best Leisure Development to Jumeirah Hotels; Special Project to Dubai Civil Aviation; and Best Advisor to Asteco.

The Best Innovative Islamic Financing Structure Award went to Adeem; Life Time Contribution Award to Duncan Smith, Head ABC Islamic Bank Asset Management; Best Islamicly Financed Project Award to King "Abdul Aziz Waqf, Jiwar"; Outstandig Contribution to Real Estate Development to Ayedh Al Gahtani, CEO of the Aloula Real Estate Development Company; Special Project for Europe to Minerva Tower; and Award for Islamic Real Estate Investment to Al-Tawfeeq Company.

The two-day conference analysed and discussed various issues from the global real estate industry. Each sector of the major geographical regions such as Europe, North America, Middle East and the Far East was examined extensively.

Mohammed Al Hashimi, CEO, Amlak Finance, the pioneer in Islamic home finance in the region, said: "The UK mortgaged property market is valued at $1 trillion, with a population of 55 million. Extrapolate this ratio to the GCC, and the property market has the potential to be worth $750 billion."

"A significant percentage of investment in the GCC is being channelled into the real estate sector, as is evident from the ongoing boom in the region's real estate markets," said Al Hashimi in his remarks at the conference. "Islamic Finance has played a major role in fuelling this growth because of the innovative and flexible Shari'a-compliant solutions being devised by the financial services industry to create extensive opportunities for the highly liquid pool of Islamic funds. This has resulted in a fourfold increase in issued sukuks in 2004 over 2003, raising an estimated $7billion in total," he added.

Mikihisa Hirai, President, Atlas Partners Japan Ltd., said: "The real estate sector in Japan has been attracting investors from US, Europe, and Middle East. "The market is booming due to the positive effect of allocation to real estate, global diversification, rationalized income based pricing, and the high income returns," he said.

Mr. Hirai added: "Low financing costs currently in Japan result in higher equity returns, which makes Japanese real estate investments attractive for global investors."

Dr. Omar Clark Fisher, Takaful Business Development, said: "The market for Asset Backed Sukuk (ABS) in Emerging Markets such as Saudi Arabia and UAE, is highly attractive and offers substantial growth potential. Takaful Operators are relatively new in business and some seem slow to innovate. A focused strategy of integrating Structured Financing / ABS and Takaful Insurance could create substantial profit opportunities and synergy for both business lines."

Rachel Tan, DTZ, said: "As for 2005, the total investment volume into the real estate sector in Europe will exceed €100 billion. There were increasing interest rates in key European markets, as well as development opportunities in Poland, Czech Republic, and Hungary."

Mustafa Al Saleh, Managing Director and CEO, Adeem, said: " ADEEM's Hotel & Resort investment Fund focused on creating Shariah Compliant atmosphere for health seeking, family, and corporate clients. Using such approach ADEEM experimented the process development in a hotel/ health Spa in Germany that attracted large numbers of the targeted clients, and is currently operating profitably. ADEEM is in the final stages of the development and establishment of the Fund in Bahrain for launch in January 2006."

Dr. Dittmar Hagedon, Attorney at Law Grafkantz Schuppen and Partner, stressed the importance of establishing a covered system, especially the regulatory, operative, and quality of cover assets requirements.

Juergen Fenk , Managing Director and member of the Board, Hypo Real Estate Bank International, spoke about the global trends in the real estate market along with the contribution of Islamic investors in the capital pool. He said: "There are major investment opportunities in both CEE and Asian markets," stressing that investors need to look further and lenders need to be more innovative due to increasing competitive factors that are currently prevailing.

Muneer Khan, Norton Rose, spoke about the legal Issues in Islamic Financing including Indemnities, Warranties, Lease period, Rental calculation methods, Compensation and liquidated damages, Set-off, Events of default, Insurance & maintenance, and Total loss.

Pritti Mithani, Price Waterhouse, discussed tax issues for Islamic finance in Europe. "The transactions might be subject to double stamp duty/capital taxes. Ijara transactions are also subject to double stamp duty/capital taxes for some jurisdictions levy stamp duty on lease transactions and other jurisdictions may characterise a financial lease as a taxable transfer of beneficial ownership," she said.

Walter Hample, Hypo Real Estate International, discussed the investment opportunities in Eastern Europe's Real Estate market. He explained that some new strategies were currently adopted in Eastern Europe to encourage investment in the real estate sector including higher gearing for the market along with greater focus on new markets, and increasing the spread between the prime and secondary product.