By Sarah Townsend
Bank seeks to capitalise on growing private rented sector in the UK
Bahrain-based Islamic investment bank Ibdar Bank said on Sunday it has invested £8 million ($11.4 million) in a UK residential project in Manchester city centre.
The £124 million ($176.6 million) Angel Gardens scheme is part of a 20 acre mixed-use development called NOMA, which is being built by a joint venture between The Co-operative Group and Hermes Real Estate.
Angel Gardens comprises 458 residential apartments, which will sit alongside the 400,000 square metres of new office, retail and leisure facilities, and four acres of outdoor space that form the wider NOMA scheme.
The development is being funded through a combination of equity invested by Ibdar and other co-investors and senior debt to be obtained from one of the banks, according to a statement issued by Ibdar on Sunday.
Ibdar claimed forecasts indicate an expected income return through operations starting at 9.1 percent on stabilised income, rising to 10.8 percent per annum after three years of operations and a targeted internal rate of return (IRR) of 15 percent over five years.
Ahmed Al-Rayes, acting CEO of Ibdar Bank, said: “In line with our strategy, we continue to identify and invest in prime global real estate with the UK market.
“With this investment, we are able to leverage and build on the positive dynamics of the private rented sector in the UK and, in particular, strong residential rental growth trends and demand in key regional cities.
“In Manchester, which is home to over 2.5 million people and more than 7.5m people living within less than one hour’s commute, we see strong and rising residential demand combined with a gap that exists for high quality, new-build residential accommodation.”