Author Archives: Clara Bailey

Viewpoint – More from multifamily?

Investment into US multifamily properties has long been a favourite of Islamic investors, and for good reason it would seem, with Newmark reporting a 20% total return for this sector in the 12 months to the end of March, driven by valuation increases.

While it is tempting to suggest that such growth cannot continue and will start to reduce, and indeed should the US economy hit a rough patch then residential of all sorts will no doubt be impacted, there are signs that this may not occur.

With recent US interest rate increases, for the first time in recent years the average monthly mortgage payment is higher than the average monthly rental payment. For the would-be buyer considering whether to do so or continue renting, this will start to have an impact, as will the ever-increasing deposit needed as the price of homes to purchase continues its ascent.

The Economist recently conducted some fascinating research into what is driving local changes in house prices, providing more detail in its analysis than a perception that everyone in the US has moved to Florida and Texas.

The Economist’s findings were that population density was a major factor in determining price changes, with occupiers seeking less crowding and more space, particularly as hybrid working becomes the new norm. But this was largely seen in city dwellers favouring the suburbs rather than the rural existence beyond, with the relative ease of their commute into town two or three times a week being factored in.

And weather was also important, with avoiding a freezing winter being more important than maxing out on the summer temperature. In short, hybrid working is encouraging everyone to seek a better quality of life, but this is not necessarily a relocation south and east, with the Pacific coast states seeing strong price increases as well.

With US$63 billion of multifamily transactions between January and March this year, Newmark reported that this is the highest first quarter figure for more than 20 years, suggesting that investors are still feeling the love for the sector, even with interest rate increases. For while Qatar First Bank recently exited its Baltimore residential building, little doubt having performed very well over its five years of ownership, there are plenty more looking to enter or build their exposure to this sector.

My advice is to keep an open mind with respect to location; the US (to state the obvious) is a huge country, and my recent visit to Los Angeles confirmed that it is not a ghost town.

Written by Philip Churchill, first published in Islamic Finance news Volume 19, Issue 24 dated 15th June 2022. 

Press Release – 90 North and Rasameel acquire prime student accommodation in Cardiff

90 North Real Estate Partners LLP (“90 North”), in partnership with Rasameel Investment Company (“Rasameel”) has acquired City Heights, a 146 bed student accommodation investment in Cardiff for £19,400,000, a 5.75% net initial yield, as part of a Shari’ah compliant investment.

Built in 2019, the property provides very attractive on-site amenities, including an outdoor roof terrace, common room with games area, on-site gym, study space, laundry room and bicycle storage. As well as being the capital city of Wales, Cardiff is a Russell Group university city and is home to more than 55,000 full time students.

Philip Churchill, Founder and Managing Partner, 90 North commented, “We’ve been targeting an acquisition in Cardiff for a while now, attracted by the relatively low provision of purpose built student accommodation and the city’s international appeal, with more than 20% of the students being from outside the UK. In City Heights, we have a market leading studio scheme, with very generous room sizes and a location that provides both ease of access to the universities and the distractions of the city itself.”

With more than 3,000 student beds currently under management, 90 North has a strong pipeline of further acquisitions in the student accommodation sector.

Mohammad Al-Thaqeb, SVP, Rasameel commented “We are very pleased to be expanding our presence in the UK with further real estate acquisitions by acquiring another great PBSA property under the existing Academy Investment Programme that we established in 2017 in partnership with 90 North. City Heights is a great addition into our mandate and in-line with the investment criteria under the Academy Programme and our large-base investors’ aspirations.”


Viewpoint – Have you heard about self-fulfilment centres?

Discussing UK retail parks with investors can be difficult. Firstly, there is trying to explain what they are. Describing them as retail warehousing suggests logistics units with a row of vans outside, while “A collection of large units around a car park” doesn’t paint an attractive image. Could it be as simple as: “It’s where those not in cities shop?”

But then there’s the typical reaction that I’m clearly delusional to suggest that anything in retail could make an attractive investment choice. Retail remains a dirty word. Of course, I understand that many will have lost money in this sector, but that doesn’t seem to stop people wading back into the stock market when they see growth on the horizon. Could it be worth another look?

From an Islamic perspective, retail parks tend to work well. Devoid of the butchers, off-licences and gambling shops of the typical high street provides a helpful starting point. “But surely all retail of devoid of tenants?” Let’s talk about occupancy.

There is no escaping the volume of retailers whether on retail parks, high street, shopping malls or all of the above, that went into administration during the pandemic. However, I see this as an acceleration of the inevitable decline of outdated business models. Plenty of retailers have adapted and are indeed thriving in an online world.

Online shopping has made us consumers impatient, but this often means that “click and collect” provides the easiest way to satisfy a need, whether that be a box of screws, a new TV or the weekly food shop. With the convenience of ample parking, and ability to “pop in” and pick up some new car bulbs, the dog’s food or browse new sofa options, retail parks work.

But what are the facts? From an historic low of sub-5% vacancy at the end of 2017, respected sector analyst Trevor Wood Associates reports that vacancy reached the mid-8%s by June last year, but has since started to fall. We’re seeing this ourselves at 90 North, with the retail park we manage outside Birmingham being back up to full occupancy, with active tenant management to extend leases and bring new tenants in.

When assessing opportunities we look for a mix of retailer types. Firstly, home essentials and electricals, with B&Q, Currys PC World, DFS and Halfords providing a typical line-up. Leisure operators in the broadest sense have been a growing aspect of retail parks, with McDonald’s and Costa Coffee being joined by gyms, kids soft-play and golf simulators. But it’s the discount retailers that are in the ascendency.

With rampant inflation and a cost of living crisis, UK households are needing to save money. Second only to home improvement store B&Q, variety retailer B&M now has the most area let on retail parks in the UK, with more than six million square feet. Their 8% growth in space during 2021, is similarly matched by Home Bargains and The Range, each with more than three million square feet. These are big operations, and given the range of what they sell do require an analysis with respect to haram products.

But still there’s a nagging doubt with many that it’s all about online these days. Well, latest data from the Office for National Statistics shows that online sales declined (yes declined) again in March this year to 26% of all retail sales, down from a high of 37% in February 2021. As the pandemic unwinds we’re not far off being back to the pre-COVID 23% level for online sales.

But still we have the troublesome word “retail”. Taking inspiration from Amazon’s fulfilment centres, I would like to suggest a rebrand for the humble retail park. Welcome to the exciting and rapidly growing sector of “self-fulfilment centres”. Avoiding the lengthy 24 hours delay to receive their items, consumers select what they wish online, drop into their local centre on the way to work or after dropping the kids at school, collect their reserved items and other essentials, and with the savings made at B&M and The Range treat themselves to a coffee and a slice of cake. Truly “self-fulfilment”. You heard it here first!

Written by Philip Churchill, first published in Islamic Finance news Volume 19, Issue 21 dated 25th May 2022. 

Viewpoint – Kicking the bricks

With the world continuing to peel back their travel restrictions, the prospect of international travel to both meet investors and for them to travel to inspect properties is hugely exciting and positive for the real estate investment management industry.

While video calls and video tours were hugely efficient tools, it is time to ‘press the fresh’ and ‘kick the bricks’ and open up new opportunities and strategies for consideration.

Over the last two weeks, we have welcomed a number of visitors from the Middle East and Asia to 90 North London, and while the weather was not as spring like as many had hoped, we were delighted to have them back in our offices.

Just as I believe that hybrid working between the office and home will remain a lasting legacy, I certainly do not see a return to the same volume of travel, particularly when you look into the flight costs these days, but it is great to have that combination of in-person on on-screen.

And while much of the global economy is becoming increasingly local, as political and pandemic concerns remain and in many cases grow, real estate investment management, whether Islamic or not, remains resolutely international.

It is great to see Investcorp making office acquisitions in both Milan and Rome, continuing to expand their portfolio across the UK and Continental Europe. Meanwhile, we at 90 North are seeing an expanding geographic interest as the pursuit of yield shows no signs of slowing.

With my travels over the coming weeks taking me to the US, Middle East and Asia, I cannot wait to get out there, although the memories of jet lag are less appealing. Safe travels!

Written by Philip Churchill, first published in Islamic Finance news Volume 19, Issue 15 dated 13th April 2022.

Press Release – 90 North joins Principles for Responsible Investment

90 North is delighted to announce that it has become a signatory to the United Nations supported Principles for Responsible Investment (PRI).

The PRI is an international global network of asset managers, owners and service providers working together to put responsible investment into practice. The principles aim to provide a framework for integrating environmental, social and corporate governance (ESG) considerations into investment decision-making and ownership practices.

Sustainable investment has been a key part of 90 North’s ethos since being established in 2011 with a brand promise of “Doing great business. With a good conscience.” 90 North has committed to a strategy that ensures all investments are environmentally sound, socially responsible and appropriately governed.

Philip Churchill, Founder and Managing Partner at 90 North said, “We are delighted to be part of this internationally recognised benchmark for responsible investment. While such practices are in our DNA, we recognise that we need to continually evolve and improve our approach, as well as making our own contribution to establishing best practices.”

David Atkin, Chief Executive Officer at the Principles for Responsible Investment said, “We welcome 90 North as a new signatory to the PRI and look forward to working with the organisation, as part of a cohesive, global effort to affect change across the spectrum of responsible investment issues.”

90 North looks forward to being a part of PRI and continuing its commitment to ESG.

Press Release – New Entrance for Cincinnati Children’s Headquarters

90 North is delighted to announce the completion of a new entrance to Cincinnati Children’s headquarters in Cincinnati, Ohio, for which it is investment manager.

This significant capital project included removal of a dated and dysfunctional covered porch and replacing it with a modern expansive metal and polycarbonate canopy for greater visual appeal.

New LED lighting both to the canopy and within the lobby improved the energy efficiency, with new glazing also helping to brighten the entryway.

The comprehensive improvements also included under-slab sensors to provide a warning if underfoot ice may be forming, uprated stormwater systems, updated landscaping and removal of columns to provide more green space and open site lines, and installation of a backlit tenant sign as part of the renovated façade.

Craig Millspaugh, Asset Manager at 90 North said, “The new entrance is far more appropriate to Cincinnati Children’s position as one of the leading and most innovative children’s hospitals in the US. As well as visually improving the entrance to their headquarters it also delivers the tangible benefits of greater energy efficiency, more natural light and a safer drop-off and pick-up facility.”

Viewpoint – If you build it, they will come

Recent research published by Newmark on the US multifamily sector puts into numbers the extraordinary strength of this asset class at the moment, and helps to explain why many investors are switching their attention to developing such products from the ground up.

I’d heard that competition for existing multifamily assets was intense, but the data is simply breath taking. Newmark reports that sales volume reached a record US$335 billion in 2021, 74% higher than the previous peak of US$193 billion in 2019. Equally remarkable is that the volume transacted in the fourth quarter of 2021 at US$149 billion exceeded the US$147 billion closed for the whole of 2020.

Investors, both Islamic or not, are drawn to the resilience of the ‘beds, sheds and meds’ sectors, and for good reason it would seem, with Newmark adding that total returns for US multifamily was 19.9% last year, more than double the long-term average of 8.6%.

GFH Financial Group contributed toward this activity last year, with acquisitions in Baltimore and Las Vegas, while Qatar First Bank was on the sell side in Connecticut.

But as demand versus supply analysis predicts, this is pushing prices up and yields on acquisitions down. With an average yield on acquisitions of 4.6%, this is the lowest for at least 20 years, and considering that this covers stock of all qualities and locations, the best product will be at 3% and below.

Even with projected strong rental growth, this makes achieving the desired returns of many Islamic investors rather difficult, and is encouraging a switch in strategy to consider developing such products, seeking tenants for the accommodation and then selling into what could remain a strong market for the next few years.

We have adopted such a change in strategy at 90 North, seeking out market leading developers to back and build, if you will excuse the pun, on the experience of our US team. Investment is a trade of risk versus reward, and we feel that the strength in multifamily supports such a move.

Written by Philip Churchill, first published in Islamic Finance news Volume 19, Issue 10 dated 9th March 2022. 

Press Release – Academy Investment Programme Predicted a First

With university students having now returned after the holidays and starting to prepare for their end of year exams, the Academy Investment Programme of UK student accommodation is predicted a First.

With just one room available out of 765 in the portfolio, this represents an occupancy rate of 99.9%.

Comprising five properties in Dundee, Edinburgh, Leicester, Royal Leamington Spa and Exeter, the portfolio is jointly managed by 90 North and Rasameel Investment Company.

George Salisbury, Associate Asset Manager at 90 North said, “While the 2020/21 academic year was undoubtedly disrupted, including many overseas students finding themselves unable to travel, near 100% occupancy for 2021/22 is proof that the occupational market has bounced back.”

With a roughly even split of rooms between ensuite and studios, the demand remains strong across the price points, with the portfolio 60% let for the 2022/23 academic year already.

Philip Churchill, Founder and Managing Partner at 90 North added, “This is proof that the online experiment that students had to endure last year has failed. Students want to be at university, not perched on the end of their bed with a laptop.”

Mohammad Tareq Al-Thaqeb, Senior Vice President at Rasameel Investment Company said, “The student accommodation sector in the UK has proven its resilience especially during COVID restrictions. We consider student accommodation as a defensive sector for our investors driven by its strong fundamentals.

Significant further expansion of the Academy Investment Programme is planned for the year ahead, with proprietary top-down analysis having identified target cities for further investment.

Viewpoint – Real estate: Go lower or embrace risk

Shariah compliant real estate investment has long been an established product offering for Islamic investment managers. Now more than ever, the allure of bricks and mortar runs deep, with investors seeking an attractive income component ahead of what can be achieved with other investments.

Real estate suits Shariah compliant investing well with a genuine business being undertaken, either to build from scratch or to purchase an existing property for its rental income. The mechanisms to assess the compliance of tenants are well established, with increasing recognition that such criteria fit well within the responsible investment ethos of environmental, social and governance criteria.

While there is a global band of professionals able to assist with selecting, structuring and closing acquisitions, what remains lacking is a scale to Islamic banks outside of the Middle East and Southeast Asia able to provide Shariah compliant finance for larger transactions, with conventional finance and a structure to insulate investors from the non-compliant payment of interest required in a pragmatic approach to allowing transactions to occur.

Review of 2021

We entered 2021 speculating on whether the strong demand for real estate investments from the last quarter of 2020 was pent-up demand from the full COVID-19 lockdowns, or something more permanent. It became clear that it was the latter, with Islamic investors competing with others to secure opportunities.

Long-leased logistics remained the most favoured, but also became out of reach for many investors with a target minimum cash yield. Life sciences and health-related properties quickly went the same way, with private residential, so-called multi-family in the US, seeing significant price increases. Everyone was looking for fundamentals they could lean on to support their acquisition decisions.

This made the office sector very interesting, which went from distinctly off the agenda as the impact of working from home was being played out, to be back in demand. Investors realised that as the largest sector of real estate it could not be ignored, but with an understandable focus on quality and local amenities that would tempt employees back in.

Investors’ confidence in the retail sector grew as the year progressed, with the death of this industry outside online having been significantly overstated. There was a realisation that people still had to eat, that home improvements were in high demand as workers spent more time in said home and that the convenience of out-of-town shopping had remained very resilient.

While much of this investing was through syndicated club transactions, REITs continued to grow in strength, but almost exclusively those out of Saudi Arabia. Singapore lost its only listed Islamic REIT, while Oman and Indonesia continued to make preparations to embrace this investment conduit.

As the year drew to a close, investors reflected on what they had achieved, with many realising that their investment volumes had been materially lower than they had wished. The opportunities had been out there, but intense competition had driven yields to unexpectedly low levels on almost anything with a long secure income stream.

It felt like a fork in the road, where the options were either to accept a lower cash yield or to embrace some risk, either with shorter leases or some vacancy. Few wanted to compromise on property quality, but equally continuing on the same path as before was no longer an option.

Preview of 2022

As we tip from 2021 into 2022, economies are doing well, inflation is high, benchmark interest rates are creeping up and investor demand for real estate remains undiminished. Inflation is important here, as recent research has reasserted the benefit of property as a hedge for inflation, but there is a lingering doubt that rising interest rates may make the exit in years to come harder to achieve.

Everyone is looking for trends and demographic or economic patterns to determine where to put their money, with a realisation that some level of risk may now be acceptable with strong economic fundamentals.

Global tax rules, not of course restricted to Islamic structuring, continue to tighten and will bite further in 2022. Everyone should get used to paying tax. Governments need to fill the coffers back up following COVID-19 lockdowns and start their funding of green initiatives.

Could 2022 be the year of energy efficiency? I think there is a strong chance and an even stronger business case that a focus on a building’s green credentials should rank up there with lease length, tenant strength and cash yield. Without a future-proofed property in this regard, tenant demand and in turn future investor demand will fall rapidly.

Last but certainly not least, with the volume of money left uninvested during 2021, I can see a renaissance in fund structures. Investors want their money deployed, not stuffed under the mattress, with those managers who can demonstrate an ability to transact being in the best position to maximise this.


With strengthening economies, new population behavioural patterns established and the importance of energy efficiency and sustainability established, it is a great time to be investing into real estate. Just do not expect to be the only one looking to buy. Yields will be lower, but it is also not a bad time to be taking on some risk.

Written by Philip Churchill, first published in Islamic Finance Annual Guide 2022. 

90 North’s 10th Anniversary

While the pandemic prevented a single gathering of the global team, 90 North organised a series of events over the last couple of weeks to mark its 10th anniversary.

After more than 18 months of video board meetings, the board members enjoyed an evening together in London’s Royal Automobile Club, 10 years to the day after the documentation creating 90 North was signed.

Straight off an overnight flight from Malaysia, we were delighted to welcome Louisa (Director, 90 North Asia) to join the London team for our offsite in the UK’s Surrey Hills. Cookery school challenged us all, along with time to enjoy the countryside and plenty of time to build our plans for 2022 and beyond.

Last but not least, Philip (Founder and Managing Partner) and Susan (Partner, Head of Finance) joined the US team in Atlanta. With strategy sessions completed and having successfully beaten the escape room challenge, the warm Atlanta sun was most welcome.

So while not the global gathering we’d hoped for, at least we all got to spend quality time together marking this significant anniversary.