the value of Islamic-owned real estate has increased to an estimated $1.1 trillion.
The growing value of Islamic-owned real estate in that part of the world goes unnoticed by the televised everyday violence in the Middle East, Asia, and Africa. The approximate value, according to Ernst & Young, is $1.1 trillion - and rising. The projected value for 2011 was $826 billion.
What is the reason for this? sale qatar
Religious leaders are abandoning complex derivatives and other risky Wall Street-derived trading concoctions in favor of putting their money from oil, gas, and earthly mineral output into tangible real estate, such as buildings they can touch and feel.
That's the latest consensus among analysts and others in a position to know or guess about where the sands are blowing in the Islamic real estate community.
According to them, the lack of a coordinated concept of investment rules is by far the most difficult issue confronting serious foreign investors in Islamic assets or holdings.
Today's laws differ greatly from one area to the next. Excessive financial leverage, for example, is not permitted in a Sharia-compliant product. Islamic law is referred to as Sharia.
Malaysia appears to be leading its Muslim brethren in creating investment-grade Islamic goods, including Islamic real estate investment trusts (REITs), according to DH Flinders, an Asia-Pacific corporate advisory practice that focuses on real estate, financial services, and small capital sectors.
The Malaysian government developed guidelines for Islamic REITs through the Securities Commission (SC) in November 2005, making Malaysia the first jurisdiction to do so. There are now two Islamic REITs in the country's total market of 13 REITs.
In Malaysia, Deutsche Bank is a major player in real estate and financing. To prevent unnecessary risk-taking, the bank expects more items to have a volatility goal overlay.
Monthly rebalancing will be one of the measures used to ensure that the goal variance is preserved. In the near future, Islamic credit-linked notes are projected to play a larger role in the overall portfolio management industry.
Singapore, like Malaysia, would like to be recognised as Asia's primary Sharia centre. The Monetary Authority of Singapore (MAS) has aided the development of Islamic finance in Singapore's financial markets over the last few years.
The world's first Sharia-compliant data center fund (Securus Data Property Fund), the world's largest Islamic REIT (Sabana Sharia-Compliant REIT) being listed on the Singapore Exchange, and Khazanah Nasional's SGD1.5 billion sukuk being the largest Singapore dollar sukuk to date have all been completed.
Islamic finance is expected to gain traction in Southeast Asia, especially in countries like Indonesia and Brunei, where banks are seeing increased investor interest in Sharia-compliant alternatives to traditional financing.
The following are examples of recent 12-month real estate financing operation in different sectors:
Dubai Islamic Bank (DIB), the Middle East's oldest Sharia-institution, recorded a net profit of $272.7 million in 2011, up 27.8% from the previous year.
DIB's competitor, Emirates Islamic Bank (EIB), on the other hand, lost $122 million in 2011, despite making a profit of $16.2 million the year before.
Kuwait Finance House, which specializes in domestic and international real estate financing, shocked the market in late March when it announced it would be divesting non-profit operations.
On the orders of the Dubai government, another Islamic real estate lender, Dubai Bank, was taken over by Emirates NBD, the largest bank in the United Arab Emirates. In 2009, Dubai Bank announced a net loss of $79 million and has not reported any figures since.
Arcapita Bank, a Bahrain-based private equity investor with a variety of real estate investments in Bahrain and Dubai, is working with advisors ahead of impending debt repayments reaching $1.1 billion.