The more things change, the more they stay the same


I’ve written before on the resilience of Islamic real estate investors and their ability to absorb shocks, most notably with Donald Trump being elected and a vote for Brexit, but I feel compelled to bring this subject up again with Mr Trump’s actions being discussed at the most senior level in US politics and Theresa May managing to lose her parliament majority in the UK.

Our investors watch these events unfold intensely, proven by the volume of messaging that occurred into the UK election night, although I confess that I hit the hay before many of my investors gave up watching the story develop. However, the sun still rose in the morning and those Islamic investors that wanted to invest in the UK remained resolute.

So, whilst political and often economic shocks come and go, the fundamental desire of Islamic investors to invest in cross-border real estate remains. This is driven by local wealth exceeding the volume of local opportunities, a desire to diversify and frequently and regrettably local uncertainty, as the tensions around the ostracising of Qatar have recently reminded us.

Such changes can provide opportunities for some, with investors divided on whether the relative weakness of Sterling to the US Dollar at the moment provides an opportunity or not.

What these changes encourage in almost all investors is a desire for boring. Boring is good. Established legal systems. Transparent markets. Recognisable and strong tenants. Long or longish leases. Modern properties. In short, properties that can withstand whatever the economy throws at them, regardless of whether such shocks are driven by politics or otherwise.

Trouble is that this is what everyone wants, and so investors are having to move further out of their comfort zone and consider new sectors, new cities and even new countries. Thankfully the Islamic finance industry is there to support them with established structures and a network of professionals to assist.

So, what to do? To quote my namesake Winston who signed off his correspondence with “KBO”, we “Keep Buggering On”, with passion, precision and perseverance.

Original article appeared in Islamic Finance News.