al-fouz uk real estate income...
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Al-Fouz UK Real Estate Income Fund
This is a brief summary of the fund that does not include all the information that will affect the investment decision making. Therefore, please review the Fund’s Articles of Association and Prospectus and consult a specialist to advise on the investment decision to participate in the Fund as the income of the Fund is subject to change. Changes in currency rates can have a negative impact on the value, price or income of the Fund’s units.
UK Real Estate – Unique Characteristics
UK real estate is by its nature heterogeneous and a wide range of opportunities exist, each providing distinctive investment characteristics. This offers the prospect for diversification, even within a portfolio of a relatively small number of properties.
The UK commercial property market benefits from some of the longest average lease lengths globally providing long term security of income to investors and tenure to occupiers providing them with confidence to invest in these assets.
The UK has proved one of the most resilient real estate markets in the years following the deep financial crisis of 2008-2009. It continues to be one of the most popular destinations for foreign direct investment, benefiting from its ‘safe haven’ status. No restrictions exist in the UK for overseas ownership, unlike other countries which often require involvement of a local partner.
The British Pound (GBP) is the fourth most traded currency in the world after US$, Euro and Japanese Yen and is the third most held currency in global reserves. It is currently trading at a deep discount to its high in 2007 against the Kuwaiti Dinar (KD). Thus, UK commercial property in KD terms is still cheaper than at its peak in 2007. This is therefore attractive to KD or US$ pegged investors.
Compared with other European jurisdictions and the United States the UK offers a relatively benevolent tax environment with UK corporation tax being reduced from 20% to 19% on 1st April 2017 and it is set to fall to 18% by 1st April 2020. Structuring of ownership offshore can also mitigate tax payable through the Non-Resident Landlord Scheme (NRLS) with 20% tax chargeable on net income of the fund after costs.
Al-Fouz UK Real Estate Income Fund
Al-Fouz UK Real Estate Income Fund (“the Fund”) is an open-ended Shari’ah compliant Fund established and managed by Al-Fouz Investment Company.
The investment strategy of the Fund is to create sustainable and repetitive returns while ensuring a well diversified real estate portfolio by investing in quality Shari’ah compliant income generating real estate assets in the UK.
The Fund is targeting to distribute 5% - 6% cash-on-cash per annum to investors and generate annual total returns (IRR) comprising net income and capital gains in excess of 8%.
The Fund aims to invest capital receipts within four months, acquiring income-producing real estate assets in the United Kingdom. The Fund also aspires to invest in assets with added value opportunities as well as making investments in securities and other real estate funds and investment in deposits or equivalent balances with Islamic banks in accordance with the investment and risk policies.
The Fund will mainly target defensive segments of the UK real estate market and anticipates investing primarily in commercial sector with a focus on student accommodation, industrial and offices.
Subscription/participation in the Fund is open for institutions, Kuwaiti citizens, nationals of the GCC, Arabs, foreigners, and non-residents in the State of Kuwait.
The Fund Manager
Al-Fouz Investment Company (“Al-Fouz”) is a Kuwaiti closed shareholding company and was established in 2009. It is licensed and supervised by the Capital Markets Authority to exercise the activity of collective investment manager. Al-Fouz paid-up capital is 15 million Kuwaiti Dinar, and it offers Shari’ah compliant investment solutions and services for individuals and institutions.
Al-Fouz, through its management and investment team, has provided various investment opportunities in the Gulf Cooperation Council (GCC) region, the Middle East, North Africa and the United Kingdom, and other markets.
For more information about Al-Fouz UK Real Estate Income Fund, please contact us at:
Address: Kuwait – Salhiya Complex – Gate 3 – Level 4Post: P. O. Box 2376 Safat – Kuwait 132024
Website: www.alfouz.com.kwEmail: Tel.: +965 2299 6514
Fund Information
• Fund Name: Al-Fouz UK Real Estate Income Fund.• Regulator: Capital Markets Authority - Kuwait• Fund Type: Real Estate Fund.• Fund Form: Open ended fund with a variable capital.• Fund Manager: Al-Fouz Investment Company.• Placement Type: Public.• Fund Currency: British Pounds (GBP).• Fund Capital: A variable capital between £15 million and £500 million GBP.• Subscription Value: 100 GBP per unit plus 2% subscription fees per unit.• Minimum Subscription:100 units per investor.• Redemption Value: Net Asset Value (NAV) per Unit.• Minimum Redemption: The minimum redemption in the Fund is 10 Units; however, the ownership of any investor at any given time should not be less than 100 units.• Distribution: The Fund aims to distribute monthly between 5% and 6% (calculated on an annual basis).• Subscription and Redemption: Subscriptions will be accepted monthly and redemptions will be processed every 6 months.• Annual Management Fee: 1% per annum of the Fund’s NAVcalculated on a monthly basis and paid on a quarterly basis.• Fund Manager Performance Fee: 20% of total returns (IRR) in excess of 8%.• Custodian: Gulf Custody Company.• Investment Controller: Gulf Custody Company.• External Auditors: Bader Al-Abduljader & Partners – Legal Audits (Russell Bedford).• Shari’ah Auditor: Shura Sharia Consultancy Company.
Al-Fouz UK Real Estate Income Fund
This is a brief summary of the fund that does not include all the information that will affect the investment decision making. Therefore, please review the Fund’s Articles of Association and Prospectus and consult a specialist to advise on the investment decision to participate in the Fund as the income of the Fund is subject to change. Changes in currency rates can have a negative impact on the value, price or income of the Fund’s units.