UK Shariah fund targets real estate investment, aid for the disadvantaged

Embracing the fundamental tenet of Shariah investment to generate a positive social impact alongside financial returns, Piccadilly & Co’s Sadaqah Garden Property Fund is moving to institutionalize this "social good" by bridging real estate investing with a mission to aid Britain’s downtrodden.

This Sadaqah Jariyah fund is targeting an initial equity raise of GBP20 million (US$27.2 million) specifically for property assets that will provide direct relief to vulnerable populations that include orphans, widows and the homeless. Among others, it plans to turn budget- and under-occupied hotels into repurposed spaces for humanitarian housing.

The fund will also be doing social good outside of the UK. Some 10% of the initial equity raised will be utilized to construct drinking water wells in six villages across the African nation of Guinea, serving approximately 12,000 people.

“For a donor, Sadaqah Jariyah is an investment in their Akhirah (hereafter). For a fund manager, it is an investment in a UK asset class," Safeer Bashir, co-founder of the fund, shared with IFN Investor.

Sadaqah Jariyah will operate on a standardized Waqf profit distribution model to maintain the perpetual nature of a charitable endowment. It utilizes a conservative leverage of approximately 50%, aiming for AuM at GBP26-38 million (US$35.4-51.7 million) once operational.

From an investment standpoint, the project targets an internal rate of return of 14%. The structure includes a hurdle rate of 8% per annum, featuring a 75/25% profit split in favor of the investors, Piccadilly’s Director-Founder Andre Henderson-Stewart said.

Piccadilly will manage the entire lifecycle of assets under the fund, from development to construction, to ensure the integrity of the social dividend, Safeer said. “The future must move toward a more integrated fund management model that bridges global capital with sustainable, humanitarian legacy.”