With a new stamp duty system in place, the UK shows no sign of slowing down in attracting Shariah dollar to its shores. VINEETA TAN casts an eye on an upcoming Shariah luxury residential project in London.
Shariah compliant Sidra Capital has confirmed in a media statement that its latest redevelopment project, to which the Saudi-based firm is acting as strategic transaction advisor, has been granted planning permission from the Westminster City Council.
Comprising two Grade II-listed buildings located on Chancery Lane purchased at GBP28 million (US$43.61 million) and to be converted into 49 luxury apartments, phase one of the London residential development is projected to begin in the final quarter of 2015. “At the end of phase one, 36 of the overall 49 luxury apartments will be completed,” explained Hani Baothman, CEO of Sidra Capital. “The gross development value of the entire project, which has attracted many Saudi and international investors, stands at approximately GBP67 million (US$104.36 million).”
Despite the recent broad-sweeping stamp duty reforms which apply higher tax to high-end buyers (See IFN Report: New UK property tax system: Opportunity for Shariah investors), the development project signifies the continued strong interest of Middle Eastern investors in the London property market, which continues to spur Islamic investment activities in the UK.
“This investment falls in line with our global real estate investment strategy,” said Abdulrazzak Elkhraijy, the chairman of Saudi’s Al Murjan Group — an investor in the Chancery Lane project. “London is considered to be a safe haven for real estate investment and between 2010 and 2014 London house prices produced annual average growth of 7.7%, compared to a UK average of 3.3% per annum.”
Shariah compliant real estate investment specialist 90 North acts as the project’s property and investment manager, while Archvade retains its role as development manager.