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Dubai Islamic Bank launches US Retail Real Estate Fund

Fund size of US$47 million

Minimum investment of US$25,000

Anticipated yield of 8.25 per cent per annum

Five year closed ended fund

Dubai, May 29, 2007: Dubai Islamic Bank (DIB) announced today the launch of its US$47 million US Retail Real Estate Fund, which invests in eight retail properties in the United States. The Sharia-compliant fund is a 5-year closed ended fund and requires a minimum investment of US$25,000.

The fund utilises Ijara, a Sharia-compliant master leasehold, and offers semi-annual coupon payments with an anticipated yield of 8.25 per cent per annum. The Fatwa and Sharia Supervisory Board of DIB will oversee Sharia compliance.

The properties are located in a range of US markets and therefore offer geographical diversity. In addition, the areas in which the properties are located have positive demographic trends, strong daytime populations, moderate to strong average household incomes, strong anchor tenants and retail markets with a positive outlook for the future.

Saeed Al Qatami, Head of Wealth Management, DIB , said: "On the heels of the launch of the DIB Water Note, the launch of the US Retail Real Estate Fund marks DIB 's rapid development in the area of wealth management. The bank now offers a diversified menu of investment products that cater to all segments of our large and growing customer base."

"We have utilised Investcorp as the investment manager for this fund as we have successfully worked with them on previous funds, and they have a very strong reputation in the real estate sector," he added.

Al Qatami noted: "We have launched similar real estate investment products in the past, and they have met with a very positive response. In keeping with our theme of diversified investment product offerings, this innovative investment product is another unique offering for our clients."

Naveed Ahmad, Head of Investments, Wealth Management, DIB , said: "We expect a strong response to this fund as it provides our customers with a complimentary investment to equity investment products, which focus on capital gains as opposed to income production."

Examining the outlook for the fund, Ahmad said: "This is an excellent fixed-income, Sharia-compliant investment vehicle. The fixed-income asset class within Islamic finance is limited, but sukuks and real estate investment products are two key vehicles that allow customers to attain regular profit payments outside their fixed deposits."

He concluded: "The US Retail Real Estate Fund enjoys a positive outlook for the future with the high occupancy rate of the properties, strong opportunities for rental growth and the support of an experienced property management team."

• Loan

• Lender / Lending / Lend

• Borrower / Borrowing / Borrow

• Credit facilities

• Advance

• Interest

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About Dubai Islamic Bank
Dubai Islamic Bank (DIB) , established in 1975, is the first Islamic bank to have incorporated the principles of Islam in all its practices. DIB is a public joint stock company and its share is quoted on the Dubai Financial Market.

The bank reported AED 1.56 billion in net profit for the year ended December 31, 2006 rising by 47% compared to AED1.06 billion for the year ended December 31, 2005. The profit for 2006, including depositors' profits, stood at AED 3.3 billion, an increase of 65% compared to AED 2 billion for the year ended December 31, 2005. Total assets in 2006 reached to AED 64.5 billion reporting an increase of 50% compared to AED 43 billion in 2005.

Financing and investment operations also delivered strong growth, with total investment and financing assets including investments in sukuks stood at AED 38.8 billion, an increase of 28% over last year. Customer deposits also showed an aggressive growth of 43% over last year reaching AED47.7 billion in 2006.

DIB has recently announced the breaking of another world record by raising US$3.52 billion Sukuk for the Nakheel Group. This Sukuk adopted a 1st of its kind structure never used before in Islamic or conventional banking history. The Nakheel Sukuk brings the total Sukuk raised by DIB in the UAE to more than US$9 billion (AED33 billion), an unprecedented amount in the history of Islamic Banking.

The bank has been proactive in creating partnerships and alliances at local and international level. DIB has adapted an aggressive expansion strategy, which started with the establishment of DIB Pakistan Limited, a wholly owned subsidiary of DIB . DIB opened its first representative office in Turkey to improve its access to that market. DIB has also acquired 60 per cent of its stake in Al Khartoum Bank and is also among the parents banks of Emirates and Sudan Bank (ESB). The steps taken mark DIB 's ambitious plans to roll out its operations into regional and international markets as part of its overall strategic plan.

For further information, please contact:
Nicholas Nesson / Tarek Fleihan
Mobile: (+97150) 4785324 / 5198511
ASDA'A Public Relations
Dubai, UAE
Tel: +971-4-3355969
Fax: +971-4-3344556
E-mail: n.nesson@asdaa.com, t.fleihan@asdaa.com

© Press Release 2007