Shamil Bank is set to launch a €150 million ($230 million) Sharia compliant fund, which takes an equal exposure on developmental and income generating real estate assets in Central and Eastern Europe.

Shamil is a leading Bahrain-based Islamic commercial and investment bank.

The Central and Eastern European Real Estate Fund will be unveiled during a roadshow kick-off event, to be held at the Ritz-Carlton Bahrain Hotel and Spa on May 11.

This will be followed by legs in Oman, the UAE and Qatar. The Fund, being launched in collaboration with Swiss-based Faisal Private Bank and Sharjah Islamic Bank, will have a term of five years, said a bank official.

'Seven assets in Romania, Bulgaria and Poland have been reserved for the fund, to be acquired by it on closing. In addition, plans are afoot for the fund to invest in the Czech Republic, Croatia and Ukraine, among other countries of the former Soviet Bloc,' said Shamil Bank head of Private and Investment Banking Group, Abdul Hakim Khalil Al-Mutawa.

“Shamil Bank’s guided investment strategy has seen us exploring opportunities in emerging market locations throughout the world. Our entry into Central and Eastern Europe countries is reflective of our strategic vision of growth; to be present in markets which demonstrate potential and sustained return on investments in the long term,” Al-Mutawa added.

He said the presence of Sharjah Islamic Bank and Faisal Private Bank in the fund is indicative of the strong confidence they have in the underlying assets and real estate market in Central and Eastern Europe.

'Central and Eastern European countries have experienced dramatic economic developments, with inward investment flows to various sectors of the economy having clearly demonstrable effects on their real estate sector,” he noted.

Since accession to the European Union (EU), Romania, Bulgaria and Poland have experienced explosive growth in their economies, primarily driven by real estate and property related investments.

“Furthermore, most of these economies are in transitional stages, ahead of their integration into the globalised economy, which is a good reason for international investors to commit to the region,' he opined.

'Our fund portfolio will combine income generating real estate assets, as well as investments in developmental projects - a strategy we believe is demonstrative of our philosophy of investing in productive assets and investments which create value for our investors and for the communities we invest in,” Al-Mutawa added.

The fund follows on the heels of Shamil Bank’s $90 million ‘Shamil Bosphorus Modaraba’, which was launched in 2007, and invests in Sharia-compliant real estate developments in Turkey.

The Bank is projecting a return on investment of close to 60 per cent over the investment term for the Bosphorous Modaraba, which caters to different market niches, activities and locations within Turkey.-TradeArabia News Service