Almost one year to the day that the UK launched its debut sovereign Islamic bond, a British residential fund is eyeing Muslim investors with its latest Central London property investment vehicle.
Last October, the UK became the first sovereign outside of the Islamic world to issue a government-backed, sharia-compliant investment vehicle. The £200 million (US$322.56 million) sukuk was oversubscribed by more than ten times. British authorities have said they will seek to develop the country’s Islamic finance credentials in order to rival global hubs like Kuala Lumpur and Dubai.
London Central Portfolio Limited (LCP), a British residential fund and asset management firm, said it is now seeking to capitalise on rising demand from Muslim investors both domestically and overseas for sharia-compliant assets.
Its second Islamic fund, London Central Apartments II (LCA II), has so far raised £100 million in capital, with the deadline for final subscriptions November 30. The fund will invest in prime areas of the UK capital such as Mayfair, Kensington and Chelsea. Shares will be quoted on the Channel Islands Securities Exchange Authority.
“As with most Sharia-compliant products, LCA II is an inclusive option for investors worldwide. For any investor seeking good market returns and wishing to benefit from buying power, diversification and professional expertise in a long-term, safe haven asset class, LCA II ticks all the boxes,” commented Naomi Heaton, chief executive officer, LCP.
“Muslims make up 25% of the world population and with 3.3 million British Muslims alone, corporates should definitely be looking at Islamic investment solutions. This is particularly true in the real estate sector, which is popular amongst Muslims who look for investments that are asset-backed or asset-based,” she added.
The LCA II fund is open to both institutional and retails investors with a minimum subscription of £85,000.
According to figures from credit rating agency Moody’s Investors Service, the overall outstanding amount of Islamic bonds, or sukuk, is expected to reach around $115 billion this year. Malaysia currently dominates the market in terms of both sovereign and corporate issuance, and as of July this year accounted for 57% of all outstanding Islamic debt.
Earlier this year, Hong Kong followed in the footsteps of the UK with one of the first Islamic debt issuances outside of the Islamic world, with a five-year, $1 billion sukuk.
