GFH unveils UK realty fund

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Investment bank plans to invest in Britain's falling property sector
Leading Islamic investment bank, Gulf Finance House (GFH)Gulf Finance House (GFH), announced the launch of Gulf Atlantic Real Estate II (Gare-II), a Shariah-compliant British commercial property fund. The fund, GFHGFH said, builds upon the success of its first United Kingdom property fund, Gare, which was successfully exited three years ago, delivering excellent income and total returns for investors.

The launch of Gare-II follows an extensive study of British commercial property market by GFHGFH'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 the value during the last six months.

Prices of many good quality buildings have fallen by 25 per cent from their peak, presenting 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 with no speculative development envisaged. Properties will be well located, income producing and rented out to good quality tenants. Like all GFHGFH products, the fund is structured on Islamic banking principles and will only invest in properties approved by the fund's Shariah committee.

The Shariah committee includes the highly respected Shaikh Nidham Yaquby of Bahrain and Shaikh Haythim Tamim from the UK. The fund's primary objective will be to produce a high cash yield over the life of the fund.

Rigorous screening will ensure properties also have the potential to generate attractive levels of capital growth for investors as property prices recover. Nick Judd, head of real-estate fund management at GFHGFH 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. British commercial property is the market of choice for many international investors who regard it as relatively low risk, transparent and liquid compared with other markets."

Alan Durrant, head of asset management at GFHGFH, said: "'We have the people, the track record and the resources to build a well-balanced fund for our investors. We are delighted to announce that leading UK chartered surveyors, Knight Frank, will once again be the strategic advisor to the fund, having been instrumental in making Gare such a success. The surveyor was involved in more UK property transactions last year than anyone else, and we are confident that their participation will add a great deal of value for our investors."

By Mahmood Rafique Business Correspondent

© Bahrain Tribune 2008