GLOBAL: Islamic real estate funds saw notable regional divergence in Q1 2025, with the Middle East emerging as the top performing region while Asia Pacific remained the largest market by asset value.
Data tracked by the IFN Investor Funds Database showed the real estate funds sector in the Middle East charting a strong 7.15% quarter-on-quarter increase in assets under management (AuM), supported by ongoing infrastructure projects and economic diversification initiatives. Saudi Arabia contributed the largest share, managing US$7.66 billion in assets with a 2.37% AuM increase, while Kuwait’s US$528 million AuM grew by 4.61%.
Asia Pacific registered an overall 3.05% rise in AuM to US$1.44 billion, powered largely by Malaysia – which led the region with US$1.24 billion in AuM posting a 4.89% growth rate that was underpinned by continued urban development and steady foreign investment. While Australia recorded a growth of 1.26% to US$77 million, the reverse was seen in Pakistan – with a 12.11% decline to US$118 million amid currency volatility and macroeconomic challenges.
The Americas also saw a marginal decline of 0.88%, reflecting mixed investor sentiment. Europe experienced the steepest drop across all regions, with AuM contracting by 10.32%, highlighting economic pressures across several key markets. Africa remained the smallest regional market, slipping 3.23%, with Nigeria accounting for the entire allocation at US$34.1 million.
With global real estate markets navigating monetary policy shifts and geopolitical uncertainty, such regional divergence is expected to persist, influencing the direction of Islamic capital flows in the sector.
