Conventional UK realtor Focus Property Investments is turning toward more Islamic dealmaking, pitching an East London medical center and a student development facility in Leeds — worth nearly GBP75 million (US$99.92 million) in total — as part-cash part-Shariah deals to investors.
While less than 3% of property sales by Focus thus far Shariah compliant, the company aims to raise this to 20% over the next three to five years, COO Eunus Ali shared with IFN Investor.
The attention on Islamic dealmaking is a notable shift for the company, with a 23-year track record in the broader UK real estate market, said Eunus, who attributes it to increasing client demand, particularly in the Middle East and Asia.
“Clients were just saying to us – ‘Is this Shariah compliant?’; ‘Can you get Shariah financing here?’”
Focus primarily serves clients outside of the UK, including expatriate Britons in Dubai and Saudi Arabia, and engages in various property sectors such as built-to-rent as well as medical facilities.
Eunus said the company’s pivot toward Shariah compliant deals gained momentum during the COVID-19 pandemic, noting significant interest thereon from clients in Malaysia, India and Pakistan.
Aligning with that interest, Focus is offering for sale now the Loxford Polyclinic — a purpose-built 37,000-square foot building in East London occupied by the UK National Health Service (NHS) — for GBP25 million (US$33.26 million) under a cash-Shariah deal, Eunus said.
Details shared with IFN Investor showed the NHS has a nine-year lease left on the building, paying an annual lease of GBP1.4 million (US$1.86 million) that brought a yield of 5.9% to the property’s owner, Loxford Complex.
“It’s a medical center, it’s operating and it’s producing an income,” Eunus said. “The NHS would be looking to remain there for (the) long-term, I would think, because the NHS never really gives up any buildings in the UK.”
For investors, Focus was looking to structure a deal where “one could come in with 50% cash and a 50% Islamic mortgage finance”, Eunus added.
At the Leeds student development facility that is currently under construction, Focus had a similar cash-Shariah structure for those buying in during the development of the 113,785-square feet property, or after its completion.
“Total development cost for the project will be GBP36.8 million (US$48.96 million) and investors can use 50% cash and 50% Shariah development finance,” Eunus said.
The completed sale price has been listed at GBP49.5 million (US$65.86 million), with Focus offering a cash-Islamic hybrid as well for funding.
