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Viewpoint – Please, Sir, I want some more… real estate.

Hoping that you are in a sympathetic mood to allow me a slightly tenuous link, with my thoughts turning to plans for some restful time at home at year end and the holiday films on television, I am drawn to Oliver’s famous line of “Please, Sir, I want some more”. For, as the holiday season is rapidly approaching, so the appetite, particularly from Middle Eastern investors for international real estate is rapidly rising.

As I write, the Qatar Investment Authority has increased its bid for Songbird Estates, the company that controls London’s Canary Wharf as well the “Walkie Talkie” skyscraper in the City and a regeneration plan for the Shell Centre on the Southbank of the Thames river, to £2.6 billion. Time will tell, but momentum would suggest that agreement may soon be reached on an acceptable price.

On a slightly more modest scale but as a further indication of such unsated appetite in the Gulf at the moment, we at 90 North have witnessed a significant increase in enquiries. What is rather counterintuitive, given that much of the wealth in the region derives from oil, is that the increased appetite has occurred at the same time that oil prices have fallen to their lowest level for five years.

The theory in the office is that such a fall is encouraging investors to work their existing assets harder. Combined with falling global inflation suggesting that interest / profit rates will remain low for some time and the consistently meagre returns from bank deposits, the returns from bricks and mortar look ever more attractive.

Whatever the reason the trend is there but should definitely not be construed as a desperation to invest, as the quality of both property and investment strategy demanded remains at an encouragingly high level.

Being sure that we can provide a significantly better quality of real estate to investors than the equivalent gruel requested by Master Twist, I am looking forward to the increased activity but also to some time off.

I wish everyone a successful run into year end and suggest that they also make time to recharge their batteries before, based on recent events, an even more frenetic 2015.

 

Author Philip Churchill

Press Release – 90 North Hires Martin Ahern as Associate VP, Investment in Chicago office

US-Team

90 North Real Estate Partners, a London-based, international real estate investment management and advisory firm, has hired Martin Ahern as Associate Vice President, Investment, to assist with the company’s expansion throughout North America.

Ahern has more than 7 years of experience in commercial real estate and has been involved in the acquisition and disposition of industrial, office, medical office and land assets. He also has experience in commercial real estate leasing and development

90 North Real Estate Partners’ acquisition strategy for North America targets office, industrial, senior living, and student housing properties, among other property types, in the $40 to $100 million range. The firm also is evaluating property with excess land for additional development.

In his role with 90 North, Ahern will review investment opportunities, develop business plans and provide assistance with closing transactions. He is based in the firm’s newly opened North American headquarters in Chicago.

“Martin brings a wealth of expertise in identifying and evaluating acquisition opportunities,” said Daniel T. Cooper, head of the firm’s North American operations. “He will be instrumental in our aggressive efforts to invest in commercial assets across North America and significantly expand our portfolio over the next 18 to 24 months.”

This announcement follows 90 North’s recent expansion into North America and the appointment of Cooper to lead those efforts. The firm recently closed on its first North American transaction, the acquisition of an interest in 8000 East 36th Avenue, a four story, 175,155-square-foot Class A office building in Denver, CO. The building is fully occupied by the F.B.I. for its Colorado and Wyoming field operations.

Ahern previously was vice president of property operations for Tandem Development Group in Schaumburg, IL. In that role he oversaw underwriting and analysis of new acquisition opportunities across multiple property types. He also managed lease negotiations and office property operations.
Ahern graduated with a B.S. degree in business administration from the WP Carey School of Business at Arizona State University in 2005.

90 North Real Estate Partners was founded in London in 2011 as an independent investment advisory firm that focuses on socially responsible real estate investments, including Shariah compliant investments. The firm has made $750 million in international real estate investments since 2012, buying office, industrial, senior living, and student housing properties throughout the UK.
Since its inception, 90 North has closed on more than $750 million of real estate transactions.

Notable investments in the UK include:

  • A 1 million-square-foot core logistics distribution center in Germany to a Volkswagen affiliate;
  • A 797-bed student housing portfolio in Canterbury, purchased for $70.9 million;
  • A $66.5 million sale-leaseback containing 10 senior living care homes in East Midlands;
  • A 136,000-square-foot office and industrial complex in Teal Park, Lincoln that houses Siemens gas turbine headquarters.

90 North Real Estate Partners

90 North is an independent investment advisory firm, specializing in socially responsible real estate investment, including Shariah compliant investing. The firm was co-founded by Philip Churchill and Nicholas Judd. Former BBC Dragons’ Den James Caan serves as Chairman of the firm. Churchill serves as the Managing Partner. The Founding Partners combine substantial property and other transactional experience, excellent track records with an absolute focus on property fundamentals to deliver superior risk adjusted returns and protect and enhance wealth.

Over the last decade, Churchill and Judd have completed a cumulative total of $2.0 billion worth of real estate transactions in Europe and the U.S.

Press Release – 90 North Advises on Acquisition of Continental Automotive Building in Chicago

Continental-Automotive-Building-big

90 North Real Estate Partners (“90 North”) has completed its second U.S. acquisition, advising an international investor on the purchase of the Continental Automotive building, a Class A office building at 21440 W. Lake Cook Rd in Deer Park, a northwest suburban Chicago suburb. Financial terms of the transaction were not disclosed. The 351,425-square-foot building is being named The Reserve at Deer Park and is easily accessed off Route 53 and 12/Rand Road.

The Reserve at Deer Park, is a seven-story, 351,425-square-foot office building that sits within the 58-acre office campus. The building was developed in 2002 by Motorola and was later acquired by Continental AG as part of a business unit acquisition in 2006. It serves as the main US building for the Interior Division of Continental Automotive Systems, Inc.

“This is another tremendous opportunity for 90 North. It underscores the firm’s North American acquisition criteria,” said Daniel Cooper, Head of 90 North’s operations in North America. “This acquisition provides a significant opportunity to enter a top-tier real estate market with a stable asset that can be enhanced in value over time.”

Continental-Automotive-Building-Dan-smallContinental has leased more than 200,000 square feet (approximately 60 percent) of The Reserve—on a long-term basis for a full range of office and research uses. The remaining approximately 135,000 square feet of space representing the top three floors of the property will be marketed for lease in 2015 and represents an ideal opportunity for another large corporate tenant.

As part of this transaction, 90 North has selected NAI Hiffman’s Jason Streepy, Jason Wurtz and Michael Flynn as the exclusive marketing agents for the building. NAI is also providing property management services and manages and leases more than 56 million square feet in the Chicago area. At the core of 90 North’s and NAI’s strategy will be undertaking a repositioning effort to transition the building to multi-tenant use.

Among these initiatives are upgrades including a new stand-alone entrance for the new tenant; building common area enhancements; and a new parking lot, among other items. The building offers large and efficient floor plates of 45,000 square feet, along with a technology-rich 300-seat auditorium; a 500-person cafeteria; and a covered parking structure. Also, an additional 525,000 square feet of office space, spread over three buildings, is approved to be built on the 58-acre site.

According to Jason Streepy, Senior Vice President of NAI Hiffman, “The property is situated in the northernmost part of the northwest suburban office market, which is particularly attractive because of the low Lake County real estate taxes. The Reserve is ideally located for corporations requiring a strong workforce. Also, it is just off of Lake Cook Road and just west of Route 53 in Lake County, across from the Deer Park Town Center.”

The Deer Park Town Center is a 406,000-square-foot lifestyle center that features tenants such as Century Theatres, Barnes & Noble, Crate & Barrel, Gap, Pier 1 Imports, Restoration Hardware and Apple. The area is known for excellent amenities—shopping, dining and recreational offerings—and highly sought after residential communities, such as Deer Park, Long Grove, Hawthorn Woods, and Barrington, among others. Average household income in the area is approximately $125,000. Other residential communities such as Arlington Heights, Palatine, and Buffalo Grove are in close proximity and are a source of an excellent labor force for businesses at The Reserve.

90 North’s partner, Arzan Wealth (DIFC) Limited, a Dubai-based advisory firm regulated by the Dubai Financial Services Authority, acted as the Strategic Advisor on the structuring and acquisition of the property.

NOTES FOR EDITORS:

90 North was established by Founding Partners Philip Churchill and Nicholas Judd and has specialized in socially responsible investment, including Shariah compliant investment, for institutional and private investors. Dan Cooper, Head of North America and 90 North Partner leads efforts at their US headquarters in Chicago.

Since its inception, 90 North has closed on more than $750 million of real estate transactions. Notable investments in the UK include:

  • A 1 million-square-foot core logistics distribution center in Germany to a Volkswagen affiliate;
  • A 797-bed student housing portfolio in Canterbury, purchased for $70.9 million;
  • A $66.5 million sale-leaseback containing 10 senior living care homes in East Midlands;
  • A 136,000-square-foot office and industrial complex in Teal Park, Lincoln that houses Siemens gas turbine headquarters;

90 North Real Estate Partners

90 North is an independent investment advisory firm, specializing in socially responsible real estate investment, including Shariah compliant investing. The firm was co-founded by Philip Churchill and Nicholas Judd. Former BBC Dragons’ Den James Caan serves as Chairman of the firm. Churchill serves as the Managing Partner. The Founding Partners combine substantial property and other transactional experience, excellent track records with an absolute focus on property fundamentals to deliver superior risk adjusted returns and protect and enhance wealth.

Over the last decade, Churchill and Judd have completed a cumulative total of $2.0 billion worth of real estate transactions in Europe and the U.S.

Arzan Wealth

Arzan Wealth is an investment advisory firm registered at the Dubai International Financial Centre (DIFC), and is regulated by the Dubai Financial Services Authority (DFSA). Arzan Wealth currently advises various clients on real estate, private equity and other investments worth a total of approximately $850 million. Arzan Wealth focuses on arranging yielding investments in major global markets, as well as bespoke investments that meet the requirements of specific clients.

Muhannad Abulhasan, CEO of Arzan Wealth commented:
“We are delighted to be partnering with 90 North again. This asset is expected to provide an attractive secure income stream, from only the 60% of the building, thus providing the consortium of investors with a clear value add opportunity by leasing additional space to enhance income and from development opportunities on the rest of the site.”

MEDIA CONTACTS:

90 North:
Dan Cooper (USA)/Nicholas Judd / Philip Churchill
US T: +1 (312) 636-4359
UK T: +44 20 7399 6753 / 6732
E: dcooper@90northrep.com / njudd@90northrep.com / pchurchill@90northrep.com

Nick Judd, Founder & Head of Investment at 90 North commented:
“This is another strategic acquisition for 90 North and one in which we are delighted to be partnering once again with Arzan Wealth. Following the opening of our Chicago office, 90 North continues to expand geographically, building on our track record in the UK and Europe. This takes recent transactions we have advised on in the US to circa $700,000,000 in total.”

Viewpoint – Churchill’s support for UK Sukuk

I recently attended a fascinating Sukuk summit organized by Her Majesty’s Treasury. With representatives from the Treasury, Revenue & Customs as well as the lawyers and bankers involved with the UK’s sovereign Sukuk issue earlier this year, the purpose was to encourage UK corporates to consider their own Sukuk issues.

Held in the ‘Churchill Room’ of HM Treasury, named after having been the location where my namesake appeared on the balcony to declare victory in Europe towards the end of World War II, the room was filled with many of us from the Islamic finance world, as well as a healthy number of corporate treasurers.

With the audience reminded that real estate makes a perfect asset on which to base the Sukuk, we learned that three of the UK government’s London properties were used for the GBP200 million (US$321.73 million) issue, being duly valued and assessed for Shariah suitability during the process.

Sharing more of the detailed structure work that was undertaken it became clear that considerable work was required to satisfy the requirements of all involved, such work which had not been evident when externally everyone was impatient for the launch.

Asked whether the UK government would be issuing further Sukuk, whilst acknowledging that the pricing had been on a par with conventional bond issues and that the demand had been phenomenal with a GBP2.3 billion (US$3.7 billion) order book oversubscribing the issue more than 10 times, the audience were encouraged to view the UK government’s issue as a further proof point for its support for Islamic finance in the UK, but to consider corporate issuances as the natural next step.

Inspired by the support shown, many in the room (including myself) were running through scenarios where further Sukuk issues could result, with finance for infrastructure projects being one possibility.

Whilst I fear that it may take a little longer than most people think for material corporate Sukuk issuances in the UK to come to fruition, but with the support of HM Treasury, the tax rule changes from HM Revenue & Customs and the enthusiasm among those of us in the real estate industry, hopefully it won’t be too long.

 

Author Philip Churchill

REJournals.com – 90 North advises on 351,425 SF office acquisition in Chicago

chicago-big

90 North Real Estate Partners (“90 North”) has completed its second U.S. acquisition, advising an international investor on the purchase of the Continental Automotive building, a Class A office building at 21440 W. Lake Cook Rd in Deer Park, a northwest suburban Chicago suburb. Financial terms of the transaction were not disclosed.

The 351,425-square-foot building is being named The Reserve at Deer Park and is easily accessed off Route 53 and 12/Rand Road. The Reserve at Deer Park, is a sevenstory, 351,425-square-foot office building that sits within the 58-acre office campus. The building was developed in 2002 by Motorola and was later acquired by Continental AG as part of a business unit acquisition in 2006. It serves as the main US building for the Interior Division of Continental Automotive Systems, Inc. “This is another tremendous opportunity for 90 North. It underscores the firm’s North American acquisition criteria,” said Daniel Cooper, Head of 90 North’s operations in North America. “This acquisition provides a significant opportunity to enter a top-tier real estate market with a stable asset that can be enhanced in value over time.”

Continental has leased more than 200,000 square feet (approximately 60 percent) of The Reserve—on a long-term basis for a full range of office and research uses. The remaining approximately 135,000 square feet of space representing the top three floors of the property will be marketed for lease in 2015 and represents an ideal opportunity for another large corporate tenant. As part of this transaction, 90 North has selected NAI Hiffman’s Jason Streepy, Jason Wurtz and Michael Flynn as the exclusive marketing agents for the building. NAI is also providing property management services and manages and leases more than 56 million square feet in the Chicago area.

At the core of 90 North’s and NAI’s strategy will be undertaking a repositioning effort to transition the building to multi-tenant use. Among these initiatives are upgrades including a new stand-alone entrance for the new tenant; building common area enhancements; and a new parking lot, among other items. The building offers large and efficient floor plates of 45,000 square feet, along with a technology-rich 300-seat auditorium; a 500-person cafeteria; and a covered parking structure. Also, an additional 525,000 square feet of office space, spread over three buildings, is approved to be built on the 58-acre site.

According to Jason Streepy, Senior Vice President of NAI Hiffman, “The property is situated in the northernmost part of the northwest suburban office market, which is particularly attractive because of the low Lake County real estate taxes. The Reserve is ideally located for corporations requiring a strong workforce. Also, it is just off of Lake Cook Road and just west of Route 53 in Lake County, across from the Deer Park Town Center.” The Deer Park Town Center is a 406,000-square-foot lifestyle center that features tenants such as Century Theatres, Barnes & Noble, Crate & Barrel, Gap, Pier 1 Imports, Restoration Hardware and Apple.

The area is known for excellent amenities—shopping, dining and recreational offerings—and highly sought after residential communities, such as Deer Park, Long Grove, Hawthorn Woods, and Barrington, among others. Average household income in the area is approximately $125,000. Other residential communities such as Arlington Heights, Palatine, and Buffalo Grove are in close proximity and are a source of an excellent labor force for businesses at The Reserve. 90 North’s partner, Arzan Wealth (DIFC) Limited, a Dubai-based advisory firm regulated by the Dubai Financial Services Authority, acted as the Strategic Advisor on the structuring and acquisition of the property.

 

Article from REJournals.com

Press Release – GlobeSt.com – 90 North Acquires Interest in FBI Building

90 North Real Estate Partners has acquired an interest in 8000 East 36th Avenue, Denver, a four story, 175,155-square-foot class A office building. The building is fully occupied by the FBI for its Colorado and Wyoming field operations. 90 North advised an international institutional investor on the investment with Alex S. Palmer & Company, the developer, based in Nashville, TN.

The building was developed in 2010 as a build-to-suit to meet the exacting specifications of the Government Services Administration (GSA) on behalf of the FBI and to meet qualifications for LEED certification, which it received in 2010. “This is a great acquisition for 90 North and representative of the type of properties we’re evaluating to expand our North American operations,” said Daniel Cooper, a partner and the Head of 90 North’s North American operations. “This is a high-quality, LEED Certified building backed by the strength and security of a long term lease by the federal government.”

This acquisition officially launches what 90 North founder and managing partner Philip Churchill said is a strategic plan to invest $750 million in socially-responsible real estate investments in North America over the next 18-24 months. 90 North’s strategy is to target core properties in major cities and prime markets across the U.S. The firm will focus on assets ranging from $40 million to $100 million. The FBI Building includes approximately 144,000 square feet of office space. An annex totals an additional approximately 31,000 square feet. The 9.9-acre site provides additional land for 44,000 square feet future expansion opportunity. The property also includes 365 parking spaces. The building is located in the Stapleton district of the Denver market. The property is approximately one-quarter mile from a full interchange at I-70 and I-270.

This location suits the government’s security requirements as well as its need for excellent highway access both to the central business district and Denver International Airport. Further enhancing this location is the planned construction two blocks away of a station on the proposed East Rail Line, which is expected to be completed in 2016. This is all part of the transformation of this area of northeast Denver from a primarily industrial marketplace to a vibrant, mixeduse area. 90 North will provide asset management services for the property.

Day-to-day management of the property will be handled by Newmark Grubb Knight Frank. 90 North was established by founding partners Churchill and Nick Judd and has specialized in socially- responsible investment, including Shariah compliant investment, for institutional and private investors. Since its inception, 90 North has closed on more than $750 million of real estate transactions. Notable investments in the UK include: · A 1 million-square-foot core logistics distribution center in Germany to a Volkswagen affiliate; · A 797-bed student housing portfolio in Canterbury, purchased for $70.9 million; · A $66.5 million sale-leaseback containing 10 senior living care homes in East Midlands; · A 136,000-square-foot office and industrial complex in Teal Park, Lincoln that houses Siemens gas turbine headquarters.

Increasingly, investors around the world are broadening the scope of their investments to include those that produce superior financial returns while also not negatively impacting on society. This is commonly referred to as socially responsible investing and may include Shariah-compliant investments. 90 North helps clients invest in a socially responsible manner, with the criteria for these investments being guided by client objectives. This may include buildings that are or potentially can be LEED certified and aide the environment; healthcare and related research facilities such as hospitals, senior housing and university facilities; and buildings with tenants that are not associated with gambling, alcohol, or other uses that can contribute negatively to society.

 

Article from GlobeSt.com

Press Release – 90 North Acquires Interest in FBI Headquarters Building in Denver, CO

FBI-big

90 North Real Estate Partners has announced the acquisition of an interest in 8000 East 36th Avenue, a four story, 175,155-square-foot Class A office building in Denver, CO. The building is fully occupied by the F.B.I. for its Colorado and Wyoming field operations. 90 North advised an international institutional investor on the investment with Alex S. Palmer & Company, the developer, based in Nashville, Tennessee.

The building was developed in 2010 as a build-to-suit to meet the exacting specifications of the Government Services Administration (GSA) on behalf of the FBI and to meet qualifications for LEED certification, which it received in 2010.

“This is a great acquisition for 90 North and representative of the type of properties we’re evaluating to expand our North American operations,” said Daniel T. Cooper, a partner and the Head of 90 North’s North American operations. “This is a high-quality, LEED Certified building backed by the strength and security of a long term lease by the federal government.”

This acquisition officially launches what 90 North Founder and Managing Partner Philip Churchill said is a strategic plan to invest $750 million in socially responsible real estate investments in North America over the next 18-24 months. 90 North’s strategy is to target core properties in major cities and prime markets across the U.S. The firm will focus on assets ranging from $40 million to $100 million.

The F.B.I. Building includes approximately 144,000 square feet of office space. An annex totals an additional approximately 31,000 square feet. The 9.9-acre site provides additional land for 44,000 square feet future expansion opportunity. The property also includes 365 parking spaces.

The building is located in the Stapleton district of the Denver market. The property is approximately one-quarter mile from a full interchange at I-70 and I-270. This location suits the government’s security requirements as well as its need for excellent highway access both to the central business district and Denver International Airport.

Further enhancing this location is the planned construction two blocks away of a station on the proposed East Rail Line, which is expected to be completed in 2016. This is all part of the transformation of this area of northeast Denver from a primarily industrial marketplace to a vibrant, mixed-use area.

90 North will provide asset management services for the property. Day-to-day management of the property will be handled by Newmark Grubb Knight Frank.

90 North was established by Founding Partners Philip Churchill and Nick Judd and has specialized in socially responsible investment, including Shariah compliant investment, for institutional and private investors.

Since its inception, 90 North has closed on more than $750 million of real estate transactions. Notable investments in the UK include:

  • A 1 million-square-foot core logistics distribution center in Germany to a Volkswagen affiliate;
  • A 797-bed student housing portfolio in Canterbury, purchased for $70.9 million;
  • A $66.5 million sale-leaseback containing 10 senior living care homes in East Midlands;
  • A 136,000-square-foot office and industrial complex in Teal Park, Lincoln that houses Siemens gas turbine headquarters.

About Socially Responsible Investing

Increasingly, investors around the world are broadening the scope of their investments to include those that produce superior financial returns while also not negatively impacting on society. This is commonly referred to as socially responsible investing and may include Shariah compliant investments.

90 North helps clients invest in a socially responsible manner, with the criteria for these investments being guided by client objectives. This may include buildings that are or potentially can be LEED certified and aide the environment; healthcare and related research facilities such as hospitals, senior housing and university facilities; and buildings with tenants that are not associated with gambling, alcohol, or other uses that can contribute negatively to society.

90 North Real Estate Partners

90 North is an independent investment advisory firm, specializing in socially responsible real estate investment, including Shariah compliant investing. The firm was co-founded by Philip Churchill and Nicholas Judd. Former BBC Dragons’ Den James Caan serves as Chairman of the firm. Churchill serves as the Managing Partner. The Founding Partners combine substantial property and other transactional experience, excellent track records with an absolute focus on property fundamentals to deliver superior risk adjusted returns and protect and enhance wealth.

Over the last decade, Churchill and Judd have completed a cumulative total of $2.0 billion worth of real estate transactions in Europe and the U.S.

Press Release – 90 North hires Daniel Cooper to lead Chicago-based office

Dan-big

90 North Real Estate Partners, a London-based, international real estate investment management and advisory firm, has expanded into North America with the appointment of Daniel T. Cooper, a 25-year veteran in commercial real estate investing, to lead its Chicago-based, North American operations.

According to Philip Churchill, Founder and Managing Partner of 90 North, this expansion is part of a strategic, long-term plan to invest $750 million in U.S. commercial real estate during the next 18 to 24 months.

“We see tremendous investment opportunities in the U.S. commercial real estate market, as strong demand continues to drive interest from around the word,” Churchill said. “A man of Dan’s credentials leading our North American operations and executing an aggressive investment strategy is a significant first step in our business plan, and we are delighted to have him.”

90 North was founded in London in 2011 as an independent investment advisory firm that focuses on socially responsible real estate investments, including Shariah compliant investments. 90 North has made $750 million in international real estate investments since 2012, buying office, industrial, senior living, and student housing properties throughout the UK.

Daniel T. Cooper has 25 years of U.S. real estate investment and operations experience across a wide range of property sectors. He most recently was Managing Director, Fund Management, for the $1.8 billion HSBC Amanah Global Properties Income Fund, where he developed an expertise in, among other things, Shariah compliant transactions. Prior to that he was Director, Portfolio Management, for the $1.1 billion Principal America Office portfolio of U.S. trophy assets traded on the Australian Stock Exchange.

Cooper is responsible for expanding 90 North’s real estate investment portfolio in the U.S. and North America, targeting assets valued from $40 to $100 million. Those investments likely will be concentrated in the office, industrial, medical/healthcare, student housing and related sectors, and located in prime markets across the continent.

“90 North has already established itself internationally as a market leader in the selection and diligent structuring of compelling real estate investments ranging from $40 million to $100 million,” Cooper said. “The U.S. market provides considerable opportunities across a number of sectors and markets. We intend to be an active investor in properties with strong fundamentals that can deliver solid tangible and intangible returns for our investors.”

About Socially Responsible Investing

Increasingly, investors around the world are broadening the scope of their investments to include those that produce superior financial returns while also not negatively impacting on society. This is commonly referred to as socially responsible investing and may include Shariah compliant investments.

90 North helps clients invest in a socially responsible manner, with the criteria for these investments being guided by client objectives. This may include buildings that are or potentially can be LEED certified and aide the environment; healthcare and related research facilities such as hospitals, senior housing and university facilities; and buildings with tenants that are not associated with gambling, alcohol, or other uses that can contribute negatively to society.

Shariah Compliant: One Form of Socially Responsible Investing

Shariah compliant investing includes investments that meet the requirements of Shariah and the principles of Islamic finance, including avoiding industries considered to have a negative impact on society, such as those related to gambling or alcohol. The investments also cannot profit from interest income; it must be donated to charity. There are structured rules for evaluating and auditing Shariah compliance; 90 North works with its investors to ensure compliance with those guidelines.

This type of investing has grown significantly during the past 10 years and also has led to specific investment funds on Shariah compliant investment.

About 90 North Real Estate Partners

90 North was established by Founding Partners Philip Churchill and Nick Judd and has specialized in socially responsible investment, including Shariah compliant investment, for institutional and private investors.

Since its inception, 90 North has closed on more than $750 million of real estate transactions. Notable investments in the UK include:

  • A 1 million-square-foot core logistics distribution center in Germany to a Volkswagen affiliate;
  • A 797-bed student housing portfolio in Canterbury, purchased for $70.9 million;
  • A $66.5 million sale-leaseback containing 10 senior living care homes in East Midlands;
  • A 136,000-square-foot office and industrial complex in Teal Park, Lincoln that houses Siemens gas turbine headquarters.

90 North Real Estate Partners

90 North is an independent investment advisory firm, specializing in socially responsible real estate investment, including Shariah compliant investing. The firm was co-founded by Philip Churchill and Nick Judd. Former BBC Dragons’ Den James Caan CBE serves as Chairman of the firm. Churchill serves as the Managing Partner. The Founding Partners combine substantial property and other transactional experience, excellent track records with an absolute focus on property fundamentals to deliver superior risk adjusted returns and protect and enhance wealth.

Over the last decade, Churchill and Judd have completed a cumulative total of $2.0 billion worth of real estate transactions in Europe and the U.S.

Viewpoint – What’s left for 2014?

Well I’m afraid to say that the summer holidays for most are now over and thoughts turn to business for the last third of the year. Whilst the holiday season is inevitably quieter, we have found many investors still asking what’s in the pipeline and how they can deploy their capital before the end of the year.

What we’re seeing and hearing from others is a definite division of appetite away from the middle ground and towards both lower risk and higher risk real estate investments.

Those is the low risk category are wanting long leased properties where there is a healthy premium in yield over the tenant’s bond rate. We recently completed, with our equity partner, the acquisition of the FBI headquarters in Denver, Colorado. With more than fifteen years remaining on the lease and the undoubted covenant of the US Government, the purchase yield provided a very healthy premium over the equivalent US Treasury.

Meanwhile, those with an appetite for higher projected returns are looking at development transactions. Appetite for UK and US residential developments remains high, but we are also seeing increasing enquiries for the industrial and office sectors where very little has been built for the last 5 years or more. Whilst in some markets rents still do not support such new builds, making acquisition of the best of the last generation of properties a wise investment, other markets are seeing rents back to the previous highs as demand outstrips the paltry supply.

The logistics sector is one such market where the continued rapid growth of online retailing is fundamentally changing the quantum of demand for both large distribution warehouses and smaller parcel sorting depots. Similarly, office rents in major cities have returned towards the previous highs, but developers are finding it difficult to secure sites when competing with residential use.

International Islamic capital remains largely focused on the UK, US, Germany and France for the moment, but whilst these markets can of course provide plenty of opportunities, there are other markets including Scandinavia in the north of Europe that I believe currently provide very attractive deals. The tide of capital hasn’t fully swept up through Scandinavia yet, providing interesting pricing if you get in quick.

Whilst currency may be a concern for those venturing outside the core currencies of the dollar, sterling and euro, an increasing number of Islamic banks are now offering Shari’ah compliant hedging products that can eliminate or at least reduce such risk. Speaking of currency, whilst the pound was valued at more than $1.70 as the summer commenced, now falling back towards $1.65 has waylaid some fears that it may continue to rise. Similarly, you would have required 5.5 Malaysian ringgit to buy each pound in July, but now require just over 5.2. I guess we have the low UK inflation environment to thank for that.

Before the UK Government concluded its sovereign sukuk issue I was asked if there would be any negative impact if the Government chose not to issue. Whilst I responded that I didn’t envisage any, since the sukuk, secured on the income from Government properties, was oversubscribed many times over I’ve been trying to observe any positive impact. I’m sure that the UK Islamic banks’ balance sheets have been helped by the issue, but beyond that the positive impact is far more subtle. Maybe we’ll see sukuk issues based on other properties later in the year, but I suspect we may have to wait a little longer.

As the underlying finance rates inevitably start to come off the bottom either later this year or early next, investor thoughts turn to what impact a rising overall cost of finance, i.e. including the margin, will have. Thankfully, at least for investors, is that as economic confidence continues and Islamic banks increase their allocation to real estate finance we have seen the margins continue to fall and have still further to fall before they reach the lows seen in 2007.

All of which brings us to the question of when the next peak of the market will be. I try not to get involved in crystal ball gazing, but it seems to me that we have a good few years left to go, with low inflation, low finance rates and bank regulation keeping the lid on over exuberance. However, as we do with all the real estate transactions we undertake, we always ask the same question: How are we going to add value to this property? Sometimes it can be as simple as buying in a rising rental market, or as relatively complicated as getting planning and building the bricks and mortar itself, but when investors stop asking this question and simply buy to “go with the flow” is when trouble starts to happen.

Wishing you happy investing over the remainder of 2014.

 

Author Philip Churchill

Islamic Finance News – 90 North Enters the US Market & Scotland the Brave?

90 North enters the US market

90 North Real Estate Partners has announced the acquisition of a controlling interest in the Federal Bureau of Investigation’s headquarters in Denver, Colorado, as part of a US$68.5 million Shariah compliant transaction.

Working with the co-owners and original developer of the property Alex S Palmer & Company, 90 North has acquired the property as part of its US$750 million drive into the US real estate market. The property serves as FBI headquarters for Colorado and Wyoming and has a further 16 years remaining on the lease held by the US General Services Administration agency.

Scotland the brave?

There is less than a month to go before Scots are asked a very simple but potentially life changing question: should Scotland be an independent country from the UK? The outcome could have material consequences, including Muslim investors’ appetite to acquire real estate north of the border.

Purchasing real estate in Scotland has always been slightly different. While England and Wales has a common legal system, the legal process in Scotland whilst similar is not the same. I made my first Shariah compliant Scottish investment just over 10 years ago whilst at Citigroup. A retail asset in the market town of Dumfries, at the time we believed it was probably the first, or one of the first, Islamic acquisitions in Scotland.

Since then Islamic investors have ventured into Scotland on a fairly frequent basis, including Gatehouse Bank’s acquisitions of a Rolls Royce manufacturing facility in Glasgow, which they have subsequently sold, and of an office property in Aberdeen let to Petrofac.

And it is Aberdeen that really is the crux of the question for many Scots. Do they believe that the oil revenue that flows through this city from the North Sea will be sufficient to improve their lives, or not?

An average of the recent polls suggests that the Scots’ union with the UK will remain, with 51% in favor of remaining part of the UK, 38% wanting independence and the balance unsure. So, whilst looking reasonably likely that the status quo will be maintained, it’s not certain.

It is this uncertainty which has prompted many investors, Islamic or not, to pause and wait. Why take the plunge now when the outcome is now so close and the consequences of Scotland gaining independence are unclear. Their desire to replicate the success of Norway’s natural resource driven economy may be fulfilled, or should they lose Sterling as their currency and new investment dry up, the future may be less rosy.

The answer will become clear on, or very soon after, the 18th September

Philip Churchill is Founder & Managing Partner at 90 North Real Estate Partners.

 

Article from Islamic Finance News