Gulf Finance House has launched Gulf Atlantic Real Estate II, a shariah compliant UK commercial property fund.
The decision to launch comes three years after it divested investments from a debut £50million ($70 million) UK property vehicle. The firm did not disclose the anticipated size of its latest vehicle or the expected returns.
The firm said that its in-house real estate fund management team had identified a rare, cyclical buying opportunity following significant falls in value during the past 6 months.
Gulf Finance House said: “The prices of many good quality buildings have fallen by 25 percent from their peak and this presents astute investors with the opportunity to lock into compelling income yields.”
The fund manager also said it has identified a number of properties with which to seed the portfolio. The firm said it is looking for properties that are well located, income producing and let to good quality tenants.
The fund will be structured based on Islamic banking principles and will only invest in properties which are approved by the fund's shariah committee.
'Twelve months ago, indiscriminate, highly geared buyers had driven prices far beyond any measure of fair value,” said Nick Judd, head of real estate fund management at GFH. “Today, with UK commercial property values having fallen so dramatically, we have the opportunity to buy income producing properties at prices well below their recent peaks. UK commercial property is the market of choice for many international investors who regard it as relatively low risk, transparent and liquid compared to many other markets.”