First Islamic launches new US venture

28 March 2002

Bahrain-based First Islamic Investment Bank announced on 25 March the establishment in the US of a joint venture real estate company.

Sunrise First Assisted Living Holdings- which is 80 per cent owned by First Islamic and its co-investors, with the remaining 20 per cent held by the US' Sunrise Assisted Living- has acquired Ijara interests in 12 properties with 940 residential units. The properties are in Los Angeles, New York, Chicago, Detriot, Philadelphia and Virginia.

First Islamic describes the transaction as being worth $203.4 million, and it has been leveraged by Ijara facilities. The US' Fannie Mae has provided an Ijara facility which covers 11 properties with the remaining one part financed by an Ijara facility from the US' GMAC.

'We are pleased to add a third asset class to our real estate portfolio,' says Atif Abdulmalik, First Islamic's chief executive officer. The bank has already established two other real estate funds in the US. 'Due to its healthcare focus, the assisted living sector is more recession resistant compared to other real estate asset classes.'

First Islamic forecasts that Sunrise First will generate a blended internal rate of return of about 13 per cent over the five-year investment horizon, inclusive of a projected annual cash yield of approximately 10 per cent a year.

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