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Estates Gazette – Arzan Backs RER’s £600m Isle of Dogs Plan


Dubai-based Arzan Wealth is funding plans to create a £600m retail-led destination on the Isle of Dogs, E14 — its first non-income producing investment in the UK.

The private business, advised by James Caan’s 90 North, has been revealed as the backer of former Ballymore director Tim Farrow’s Real Resolution’s purchase of a half share in Ashbourne Beech. Ashbourne is the vehicle established to bring about the 1.3m sq it Crossharbour District scheme.

Arzan, led by chief executive Muhannad Abulhasan, manages more than $750m (£444.6m) for wealthy clients. It made its UK debut in 2012 with the acquisition of a 125,000 sq ft warehouse and related offices let to L’Oreal for £9.8m, which it sold last month to a UK fund for £10.9m, reflecting an IRR of 16.6% for its investors.

The Dubai investment house aims to buy $500m of assets in the UK over the coming years and is targeting an annual yield of around 8%.

The decision to back the Crossharbour scheme is a break from this strategy, however.

Nick Judd, founding partner at 90 North, said: “Income-producing properties in the UK are starting to look very expensive as a result of money targeting the market. International investors such as Arzan are becoming more confident about development, which is looking like a more feasible way to find attractive yields.”


Article from Estates Gazette

Viewpoint – $180 Billion of Middle East International Real Estate Investment

CBRE have just published a diligently researched and fascinating report into the accelerating appetite amongst Middle East investors for international real estate. Entitled “In And Out: Middle East”, it reminds its readers of the drivers for such investment as well as the trends that they are witnessing.

Whilst it is widely appreciated that the wealth generated in the Middle East from natural resources necessitates international investment, CBRE add interesting observations that regional investors tend to be long-term holders of real estate which restricts intra-regional trading of assets and as a result the majority of regional activity is centred on land and residential units. With such a restricted range of local opportunities it is no wonder that the money spills over to international locations.

The acceleration of international investment by Middle East sovereign wealth funds, high net worth individuals, developers and property companies is most clearly seen in the growth from a recent low of $2 billion in 2009 to $13 billion in 2013, itself a 86% increase over 2012. The biggest growth by investor type is amongst the sovereign wealth funds, with the report commenting that this is motivated by them finding the equity markets too volatile and the bond / sukuk markets too low yielding.

So where is this capital going? Unsurprisingly, over the last two years 44% of it has gone into London. In fact, the top four locations of London, Paris, Milan and Lyon are all European and account for two-thirds of the total, with US destinations further down the list.

As for the future, CBRE predict a huge $180 billion of international investment from the Middle East over the next ten years. They forecast that 80% of this will be heading to Europe, and whilst the UK will remain favourite, a larger proportion than historically the case will be heading to Continental Europe and that within the UK, appetite will continue to broaden to locations across the UK and across a broader range of real estate sectors, as we at 90 North have seen ourselves. The balance of 20% is thought to be split equally between the US and Asia-Pacific.

With projections such as these I’m very optimistic for the prospects of the Islamic real estate industry.


Author Philip Churchill

Estates Gazette – Caan’s 90 North Blows In To The Windy City


James Caan’s Islamic real estate firm 90 North has opened an office in Chicago as part of a $750m (£440m) US investment drive.

The debut US operation will be led by veteran US fund manager Daniel Cooper, who previously managed HSBC’s $1.8b shariah-compliant Amanah Global Properties Income Fund.

The company will invest initially in second-tier cities, but is eager to branch into the private rented sector, founding partner Philip Churchill said. It will consider investing in retail, logistics and alternatives and will target net cash yields of 6-8%.

“The property recovery in most US cities is nine to 12 months behind the UK. We see opportunities in cities that are prime but not premier league,” he said.

The news comes after founder of St Bride’s Managers, Robert Houston, urged UK-focused investors to consider diversifying into the US property market.

Dragons’ Den star Caan founded 90 North in June 2012, and the company has since worked on £430m of real estate transactions on behalf of a predominantly Middle Eastern client base.


Article from Estates Gazette

City A.M. – 90 North Real Estate Partners


James Caan’s investment advisory firm, which specialises in Sharia-compliant real estate investment, has appointed Daniel Cooper to head its new business in Chicago.

Cooper was previously managing director, fund management for the HSBC Amanah Global Properties Income Fund, and director, portfolio management for the Principal America Office portfolio.


Article from City A.M.

Viewpoint – Student Accommodation: Attractive Fundamentals


Whilst UK student accommodation has become a mainstream investment for Islamic investors over the past few years, recent evidence suggests that activity has increased even further.

News reached me this week that Ahli United Bank is close to reaching full investment of its £150,000,000 student fund, with forthcoming acquisitions in Bristol and Glasgow, both cities identified as being attractive locations for further student accommodation investment. Meanwhile, our own 90 North has witnessed increased investor interest, beyond the near 2,000 beds that our own 90 North already advises on.

The fundamentals of the market remain very sound with property adviser Savills summarising it well: “Purpose built student housing produces reliable rental income flows which, although derived from short tenancies, is secured by depth and stability of demand.”

Whilst UK student numbers dipped in 2012 due to tuition fees rising threefold to £9,000 per annum, this turned out to be simply a pause for breath, with UCAS, who co-ordinate all applications, reporting that a record number of students were accepted for the 2013/14 academic year. However, the growth appears to be largely domestic, as international student numbers are starting to stabilise due to tougher visa restrictions.

On the supply side, student accommodation developers are competing with residential house builders for sites and with the well reported rapid growth in UK house prices, those with sites secured at a competitive price are a privileged position. Recent evidence of this includes Unite, the largest student accommodation operator in the UK, announcing that it was reversing a focus on London due to the high cost of securing sites.

So, if this leads us to conclude that regional cities and affordable rents for domestic students may provide the best opportunities, how best to make money from it? Regrettably for Islamic investors we are not alone in spotting the opportunity, with significant international investment, particularly from the United States of America. Whilst low but stable yields may suit some investors, those looking for higher returns need to focus on assets where the rents and management can be materially improved or development scenarios. Local knowledge remains key.


Author Philip Churchill

Islamic Finance News – Special Dividend for Siemens Investors & Sukuk Race


Special Dividend for Siemens Investors

The independent board of Hill Top UK, the SPV owning Siemens Gas Turbine Division HQ, has declared a 1.5% extraordinary dividend to shareholders for 2013. Investors have received a total cash yield of 9.25% during last year, consisting of 7.75% yearly ordinary monthly yield payments as well as the special 1.5% dividend mentioned. The acquisition of Siemens was partially financed in a Shariah compliant manner by a German bank. Dubai-based Arzan Wealth is the strategic advisor on the acquisition and ongoing management of the property while UK-based 90 North Real Estate Partners acts as the property advisor.

Sukuk Race: Will the UK Lose Out if it Doesn’t Take Home First prize?

South Africa is nearing the finish line with Hong Kong hot on its heels, leaving the UK (and Luxembourg) far behind. Unfortunately, this casts a dark cloud over UK’s word to the world that it intends to become the first non-Muslim sovereign Sukuk issuer — a promise that ignited the whole Sukuk race buzz in the first place. So was the UK’s promise made up of empty words? More importantly, has this thrown Shariah-seeking investors’ confidence in the British sovereign out the window?

“Whilst it would be a great statement to be able to report that the UK was the first non-Muslim country to issue a sovereign Sukuk, I don’t see this having any impact on investor sentiment towards the UK if it isn’t,” said Philip Churchill, the founder partner of Shariah compliant 90 North Real Estate Partners, to Islamic Finance news (IFN). And it seems that Churchill’s sentiments resonate with the wider industry.

“Notwithstanding domestic appetite and requirement, if the UK is not the first to issue it will have no impact whatsoever on the appetite for the Sukuk from abroad, given the UK’s rating and it’s position and profile within the global financial marketplace,” Stella Cox, the managing director of DDCAP Group, told IFN. “I am aware that extremely strong interest is being expressed in the Sukuk by both Islamic and conventional institutions,” Cox revealed. “In fact, to date, the only regret that has been expressed to me by potential investors is that issuance size is not greater.”

According to Roshan Madawela, CEO of Research Intelligence Unit, investor would not be deterred “so long as the UK keeps on moving in its current direction” as London still leads when it comes to financial know how.

Imam Qazi, a partner with legal firm Foot Anstey, concurred with the popular opinion. He added however, that: “I think it is crucial for the UK government to make the Sukuk issuance a reality, to boost London’s status as a global capital for Islamic finance.”

Like Imam, John Dewar, the chair of the Islamic Finance Group at Milbank Tweed Hadley & McCloy, also remains confident that London’s firm footing in the global capital markets will anchor the country’s lead as a Western Islamic finance hub. Nevertheless: “There is some speculation that a reason for the delay to the UK’s first sovereign Sukuk is the relatively low yield currently being offered on UK treasury bills,” he noted. “So, will a UK Sukuk prove attractive enough to Islamic investors, when yields from other potential sovereign issuers are materially higher?”

Speaking to countless industry insiders on the matter, the popular opinion is one favorable to the UK. IFN has however also encountered a few sceptics who opine that the UK’s delay in issuing a sovereign Sukuk despite already having a robust regulatory framework in place and the necessary talent within reach, weakens its aspirations towards becoming an essential component in the Islamic finance growth story.

“Were South Africa or Hong Kong to issue a government Sukuk prior to the UK this would be a devastating blow to the UK based Islamic financial institutions, and is likely to take some time to overcome,” opined Dr Natalie Schoon, the principal consultant of Islamic finance advisory firm Formabb.

Scepticism aside, an authoritative industry source defends the UK by assuring that the country is simply working apace to get the facility delivered in good order — and that “perhaps it will come sooner than some people expect!”


Article from Islamic Finance News

Islamic Finance News – 90 North Expands Team & Pole Position For Growth


90 North Expands Team

Shariah compliant real estate investment specialist 90 North Real Estate Partners has expanded its team in London with its recent recruitment of four new members to include: Mark Peck as head of operations; Cherine Aboulzelof as head of Continental Europe; Sabira Hasham as an asset management analyst; and Pylyp Likhterov as an investment analyst.

Pole Position For Growth

As I have reported over the last six months, investors have been increasingly optimistic about the prospects for the UK real estate market. Such confidence was endorsed last week by the IMF, which materially increased the UK’s projected 2014 GDP growth rate from 2.5% to 2.9%.

Whilst this growth may appear a little pedestrian compared to what is being achieved in the home markets of Middle Eastern and Southeast Asian Islamic investors, it places the UK in
pole position among the major western economies, ahead (just) of the US with a forecast 2.8% growth this year.

With such economic optimism comes confidence to go geographically further outside London and seek more value add opportunities, and again Islamic investors are ahead of the pack. Recent research from Deloitte reported that it is “seeing more international investors looking at regional opportunities”. Islamic investors have been ahead of this curve, and I’m aware of a number of successful exits, particularly in the industrial, logistics and student accommodation sectors, where Middle East investors have bought well in these sectors and have been able to realize a healthy profit.

As for the risk spectrum, whilst hard to compete with the UK funds for value add office investments, we are still seeing opportunities in the retail and so called ‘alternative sectors’, with a growing proportion of predominantly Middle East Islamic investors looking for more core plus, value add or operational risk. Meanwhile, as I reported last month, those seeking residential development exposure are growing by the day.

Is this all too much too soon? I don’t think so. With positive economic news and the weather finally improving after the UK’s wettest winter since records began, the man in the street has a spring in his step, which translates directly or indirectly into positive news for the real estate industry. The caveat (as ever) is that investors should always buy the transaction, not the market, i.e. diligent due diligence and identifying why (or not) a particular transaction can beat the market is paramount, even if that market is going up already.

Philip Churchill is the founder partner of 90 North Capital Partners. He can be contacted at


Article from Islamic Finance News

Estates Gazette – Caan Homes In On Care


The investment firm chaired by former Dragons’ Den star James Caan, 90 North, has bought 10 care homes in a sale and leaseback from operator Prime Life, for £40m.

The acquisition is 90 North’s first in the care home sector. The Midlands-based homes, which have a total of 510 beds, provide nursing care for elderly people and adults, and have 35-year leases with annual inflation increases to the rent.

The sharia-compliant investor said it is carrying out due diligence on further purchases in the same sector, in response to investor demand from the Middle East and south-east Asia.

Caan said: “This transaction contributes to 90 North’s quadrupling of assets under management since this time last year.”

Deloitte Real Estate advised 90 North; Knight Frank advised Prime Life.


Article from Estates Gazette

Estates Gazette – Caan Steps Into Kidderminster


James Caan’s investment company 90 North Real Estate Partners has bought Crossley Retail Park in Kidderminster on behalf of a Dubai-based client Arzan Wealth for £41.5m – a 7.3% yield. The 205,000 sq.ft. complex was bought from Chester Properties. Wilkinson Williams advised 90 North; HP4 advised Chester Properties.


Article from Estates Gazette