London, 22 May 2011: Bank of London and The Middle East (BLME), the London based wholesale Sharia'a compliant bank whose main shareholders are Boubyan Bank, National Bank of Kuwait, today announced the launch of its Light Industrial Building Fund (LIBF), a Sharia'a compliant UK real estate fund which invests in sustainable property assets. 

The LIBF, which targets institutional investors, invests in carefully selected light industrial buildings across the UK. The target cash on cash yield is 8% to 10% per annum, with quarterly cash dividends paid to investors.  Target IRR (Internal Rate of Return) is 15% for the five-year duration of this closed ended fund. The target close for the fund is between £50 million and £100 million in equity, which will be leveraged to create a portfolio of up to £200 million of assets.

"As the UK economy recovers, we anticipate an increasing number of SMEs operating new businesses from industrial estates," commented Derek Weist, Director - Asset Management at BLME. "Pricing in this sector is considered attractive with high yields available on many types of industrial property assets. In addition, the highly diversified mix of tenants, by industry and geography, and strengthening occupier demand supports the prospect for rental growth in future, which can provide a strong positive cashflow for private client and institutional investors."

The UK multi-let light industrial building sector currently covers over £30 billion of properties, located in approximately 6,000 industrial estates across the UK. These are typically low technology, low obsolescence buildings constructed of concrete, brick or steel, and are used for light manufacturing, assembly, storage, warehousing and distribution activities.

Nigel Denison, Head of Asset Management for BLME, said: "This is an exciting opportunity for institutions to invest in a different type of UK property asset in a sector which offers excellent potential and value. The launch of this fund is a result of our ongoing strategy to develop innovative products that offer clients quality assets which provide diversification and competitive returns. "

The fund is available to both UK resident and non-UK resident investors. The fund is a compartment of the BLME Sharia'a Umbrella Fund SICAV-SIF, which is domiciled in Luxembourg.

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About BLME
Bank of London and The Middle East plc ("BLME") is an independent UK wholesale Sharia'a compliant bank based in London. BLME received FSA authorisation in July 2007 and is the largest of its peers in Europe. It is led by a management team that brings together a combination of experienced international bankers and leading experts in Islamic finance.

The five core areas that set the foundations for BLME's competitive offering are Private Banking, Asset Management, Corporate Advisory, Corporate Banking and Markets Division.

BLME is dedicated to offering innovative Islamic investment and financing products to businesses and high net-worth individuals in the European, US, Asian and MENA regions. To ensure that BLME's services and operations are wholly Sharia'a compliant, the Bank has a dedicated Sharia'a Supervisory Board ("SSB"). The SSB's role is to review contracts and agreements relating to all transactions ensuring that they are consistent with the principles of Islamic jurisprudence.

About Islamic banking
Islamic Finance upholds the principles of fairness, integrity and transparency. The principle of fairness is reflected in the risk and reward-sharing element that forms the foundation of every Islamic financial transaction. 

Islamic finance aims to create business activities that generate a fair and equitable profit from transactions that are backed by real assets. This method of financing avoids speculation, short selling and excessive credit creation whilst encouraging sound risk management procedures. 

Islamic banking has a robust system of risk management and self-regulation to ensure that each transaction is transparent and that the appropriate due diligence and higher standards of disclosure required are observed. To ensure compliance with these requirements each transaction and agreement is reviewed and approved by a Sharia'a Supervisory Board. This Sharia'a specific regulation and governance is in addition to the conventional regulation that applies to all UK based financial institutions. 

For More Information Contact:
Fawaz Al-Sirri
Bensirri PR
Mobile: +965-66622448
fawaz@bensirri.com

© Press Release 2011