UK regeneration projects: Investing using Islamic Finance

UK regeneration projects: Investing using Islamic Finance
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today 30th July 2015

Private Sector Sharia Compliant Investment Opportunities in UK

UK Trade & Investment (UKTI), a Government Department which helps UK-based companies succeed in the global economy today released a brochure which contains Sharia compliant UK regeneration investment opportunities in the UK.

The Regeneration Investment Organisation (RIO) has identified projects at a point of development where project and finance structure can be discussed with project promoters. These projects are listed in the brochure in their totality: some parts may not be Sharia-compliant.

The following projects are listed:

  • Gatehouse PRS Residential Fund
  • Manchester Place
  • Mayfield, Manchester
  • Middlewood Locks, Manchester
  • Alderley Park, Cheshire
  • Smithfield, Birmingham
  • Legal & General Regeneration partnership proposal
  • East of Leeds Orbital Route, Leeds
  • Thorpe Park, Leeds
  • Atlantic Gateway, Liverpool-Manchester
  • Old Oak Common
  • Centre for Advanced Knowledge Engineering
  • Healthy Ageing Innovation Campus, Lancaster
  • Stephenson Quarter, Newcastle
  • Park Hill, Phase 2, Sheffield
  • London Cancer Campus, Sutton, London
  • Silvertown Quays, Royal Docks
  • Slough Town Centre

Islamic Finance in the UK

The United Kingdom is a leading global centre of Islamic finance. British banks HSBC and Standard Chartered are amongst the leading global arrangers of Sukuk, whilst English Law dominates the sector with the majority of the worlds issued international sukuk being governed by the English legal system. Even further afield English law is the preferred choice because of the certainty and predictability that it offers; Abu Dhabi’s new financial ‘free zone’ plans to base its rules on English common law.

The UK is home to the west’s first fully fledged Shari’ah-compliant retail bank and currently has five true Islamic banks. In 2014, the United Kingdom became the first Western European country to issue a Sovereign Sukuk with a 5 year dated £200M issuance. According to data published by Al Rayan Bank, as end of 2014, the UK was the world’s ninth largest market, the leading Western country and Europe’s premier centre of Islamic finance with $19bn of reported Sharia compliant assets. There are more than 20 international banks operating in the UK are working in Islamic finance, 6 of which are fully Sharia compliant. The UK has the largest legal services market in Europe and around 25 major law firms with offices in the UK are supplying Islamic legal services.

London in particular is an important financial centre, with major international firms and the Middle East’s biggest traditional banks offering Islamic products in this city. Islamic financing activities started in the UK in the 1980s when the London Metal Exchange provided Shari’ah-compliant overnight deposit facilities based on the murabahah principle.

Sharia Financing for UK Real Estate

In April of this year UK Sharia compliant Gatehouse Bank announced the acquisition of Fountainbridge, a student accommodation property located in Edinburgh, United Kingdom for £20 million, and prior this had completed of terms for financing of the Blakelands Industrial estate located in the Milton Keynes area of the UK.

Islamic finance investors are taking a keen interest in UK real estate by funding a number of high profile projects. Europe’s tallest building, the Shard in London was financed by Qatari consortium that acquired an 80% stake for £150m (€192m), whilst nearby, in the prime central London real estate territory, a consortium comprising Qatari Diar Real Estate and Investment and the Candy brothers’ CPC Group bought the 5.2-hectare Chelsea Barracks site for £959m.

In 2012, a Malaysian consortium bought for £400m the 16.8-hectare Battersea Power Station site, which had been derelict for three decades. Work is now under way on a massive 3,444-home scheme that will create a new city district.

Download Brochure

pdf Sharia compliant UK regeneration investment opportunities (1MB)

UK Trade & Investment is the Government Department that helps UK-based companies succeed in the global economy helping overseas companies bring their high-quality investment to the UK’s dynamic economy acknowledged as Europe’s best place from which to succeed in global business.

Join the conversation at #IslamicFinance and #Sukuk