Flip through the latest issue of Gulf Weekly.
Gulf Finance House (GFH) launched the Gulf Atlantic Real Estate II (GARE II), a Sharia compliant UK commercial property fund, which builds upon the success of GFH's first UK property fund - Gulf Atlantic Real Estate (GARE) which was successfully exited in 2005 having delivered excellent income and total returns for investors.
The launch of GARE II follows an extensive study of the UK commercial property market by GFH's Real Estate Fund Management team. The study, which also reviewed other European markets, clearly identified a rare, cyclical buying opportunity in the UK commercial property market following significant falls in value during the last six months. The prices of many good quality buildings have fallen by 25 per cent from their peak and this presents astute investors with the opportunity to lock into compelling income yields.
The fund manager has already identified a number of properties with which to seed the portfolio. The fund will be targeting standing properties and no speculative development is envisaged. Properties will be well located, income producing and let to good quality tenants. Like all GFH products, this fund is structured based on Islamic banking principles and will only invest in properties which are approved by the fund's Sharia committee. The Sharia committee includes Sheikh Nidham Yaquby of Bahrain and Shaikh Haythim Tamim from the United Kingdom.
The fund's primary objective will be to produce a high cash yield over the life of the fund. Rigorous screening will ensure that properties also have the potential to generate attractive levels of capital growth for investors as property prices recover.
Nick Judd MBA MRICS, head of Real Estate Fund Management at GFH and fund manager of GARE II, said: "Twelve months ago, indiscriminate, highly geared buyers had driven prices far beyond any measure of fair value. Today, with UK commercial property values having fallen so dramatically, we have the opportunity to buy income producing properties at prices well below their recent peaks. UK commercial property is the market of choice for many international investors who regard it as relatively low risk, transparent and liquid compared to many other markets."
