Seera Investment Bank B.S.C., a Shari’a compliant investment bank headquartered in Bahrain, announced the successful completion of a new transaction in the UK Student Housing sector.
The transaction comprises a Shari’a compliant structured financing facility for a new purpose built student housing project and commercial property in central London. When completed next year, the property will offer 339 student rooms and 37,000 sq. feet of commercial space.
Construction of the property, which is located near Aldgate East station in Central London and in close proximity to several higher educational institutions, is well underway with the first phase having just been completed.
Mr. Khalid Al Nasser, Seera’s Chairman of the Board of Directors commented “We are really excited about this opportunity. The strong position of the UK and London as a destination for higher education combined with the persistent shortage of purpose built student accommodation in the UK provide a very solid platform for the UK student housing sector from an investor point of view.”
“The demand supply gap in the sector supports a positive outlook for rental income and capital growth. The student housing sector is also of interest to Seera and its investors given the current economic climate, the recession proof nature of demand for UK student accommodation and the yielding nature of investments in the sector. This particular deal is underpinned by the property’s prime location, attractive investor returns, relatively short investment tenure and the deal’s favorable risk profile.” added Mr. Al Nasser.
Mr. Abdulla Janahi, Seera’s Chief Executive officer commented “Attractive risk adjusted returns for investors are a major attraction of this investment, including an annual yield around 8.5%, an expected IRR between 13 to 14% on exit, and a relatively short investment period of just two and a half years.”
“During the transaction structuring phase, we gave particular importance to mitigating risks and have put in place innovative mechanisms to maximize protection from downside risks. The involvement and backing of Mace, a leading UK based developer, project manager and construction partner is also of particular importance, and provides confidence that the project will be executed to high specifications, on time and on budget.” Mr. Janahi further commented.
On how this deal fits with Seera’s investment approach he said “Seera’s strategy is to invest in deals with strong fundamentals and in industries which are not highly cyclical. We believe that given the low correlation of the student housing sector with economic cycles, the strong market fundamentals of the sector and the property’s attractive features, this deals fits very well with this direction.”
Seera has investments in the industrial manufacturing and transportation sectors in addition to smaller investments in the utilities and affordable housing sectors.
The Bank’s investment strategy is to maintain a diversified investment portfolio geographically and industry wise, focusing mainly on defensive sectors underpinned by strong fundamental demand, and to avoid speculation driven sectors.
Ameinfo
