10th August 2023, Emirates News Agency
Abu Dhabi Islamic Bank (ADIB) announced that it has continued to grow its UK commercial real estate financing portfolio with over £100m in new financing assets in the first six months of this year.
Closed deals include providing structured financing for various projects, such as a 343-unit co-living scheme in North Acton, West London, a 400 key hotel at Gatwick Airport, a 133,000 sqft Grade A multi-let office campus in Guildford and a 153,000 sqft national HQ office campus in Newport, Wales.
ADIB has been able to offer selective Islamic structured financing solutions to its clients, facilitating both refinancing and new acquisitions.
These achievements have come amidst a challenging UK Commercial Real Estate market, which has experienced a significant correction in capital values over the last 12 months, largely due to adjustments in the higher rate environment, impacting investment activity.
The Bank witnessed a strong emphasis on the sustainability and growth prospects of rental income, which drives returns and services debt. Consequently, robust investor demand for the ‘Living score favourably on the criteria of the real estate assets and contribute to fuel substantial rental Sectors’, particularly in high-quality purpose-built student accommodation (PBSA) and build-to-rent (BTR) assets, have contributed to income growth.
With a strong track record in offering bespoke and competitive Sharia-compliant property financing solutions for its clients in the UK, ADIB has closed senior financing transactions over AED3 billion (£650 million) in the last 5 years. The bank’s London-based team is offering financing support and advisory services for GCC clients looking for commercial and residential property investments across the UK.
According to Capital Economics, average capital values saw decline by 12.6% during 2022. Despite this backdrop, commercial real estate financing remains active. In April 2023, net financing to UK commercial real estate (including developments) reached £1.2bn, up 137% month-on-month increase and its highest level since December 2021, according to the Bank of England.