Al Salam Bank of Bahrain has announced the opening of a real estate investment trust that makes investments in Asian properties in accordance with Sharia law.
The new fund, which will be managed by Swiss-based B&I Capital AG, will have ASBB as its seed investor. According to the announcement, the new REIT will invest in 15 to 35 properties with a focus on providing investors with a long-term, superior risk-adjusted total return. The Islamic lender withheld information about the fund’s size.
Dr. Anwar Khalifa Al Sada, The deputy CEO of ASBB, stated in the announcement that the fund “aims to deliver benefits of diversified real estate ownership in Asia while avoiding many of the pitfalls of holding physical property and real estate developer equities.”
The REIT will permit investments in real estate, a preferred asset in Islamic finance, which adheres to regulations like prohibiting alcohol, tobacco, and gambling.
According to the bank, ASBB was a major investor in Sabana Industrial REIT, the first REIT in the world to adopt Islamic principles when it was listed on the Singapore Stock Exchange in 2010.