Al Salam in $58m UK property refinance deal
Manama, September 5, 2010
Al Salam Bank-Bahrain, a leading Islamic financial institution, provided £38 million ($58.7 million) in a unique Shari’a compliant mezzanine facility to refinance a landmark commercial property located in Canary Wharf, the financial district of London.
The property is leased in its entirety to a leading, multinational financial institution with A+ long term rating with stable outlook form Standard & Poor’s, said a statement from Al Salam Bank-Bahrain.
The lease, which carries an unexpired term of 17.5 years, is on a fully repairing and insuring basis, it added.
The building, designed by Skidmore, Owings & Merill and completed in October 2002, comprises a high quality Grade A office building extending to 536,338 sq ft.
The property lies to the north of Canary Wharf, adjacent and to the northeast of One Canada Square the focal point on Canary Wharf. The twin towers of HSBC Bank and Citibank are situated in close proximity to the property.
Yousif A. Taqi, Al Salam Bank-Bahrain director and CEO, said, 'The UK’s commercial real estate market has seen a significant improvement over the last 12 months and our strategy to exit Milton Gate in June came at a time when the Bank had alternative attractive opportunities with improved risk-return profiles, such as this mezzanine facility.'
'In these volatile market conditions, investment protection is a key factor in our investment strategy,' he explained.
Taqi pointed out that at a time when the interest rates in the United Kingdom were at historic lows, there were significant benefits in providing mezzanine finance.
'This is Al Salam Bank-Bahrain’s second transaction in the UK after the successful acquisition of Milton Gate last summer. This opportunity will enable our clients to benefit from a high yielding product while minimizing their downside risk,' he added.
Taqi said the successful closing of the transaction demonstrated the bank’s ability to provide its clients with differentiated investment opportunities with attractive terms that are structured to take advantage of current market conditions.
Al Salam Bank-Bahrain was advised by Herbert Smith and Knight Frank on legal and commercial matters relating to the transaction, respectively.-TradeArabia News Service
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