NabInvest, the bank’s direct investment management business, has formed a joint venture with Oxley Corporate that will own 80 per cent of the company, which manages the $S967 million ($774 million) Singapore-listed Cambridge Industrial Trust.
The trust is currently seeking unitholder approval to convert to a Shariah-complaint REIT to cash in on growing wealth in the Middle East.
But the trust will first have to finalise a Shariah-compliant financing solution for $S369.3 million of interest-bearing loans, because to be Shariah-compliant, a REIT must not pay or receive interest.
While the Islamic Bank of Asia has been appointed adviser for the conversion, the Hong Kong & Shanghai Banking Corp is advising on the refinancing solution.
Shariah law will also prevent the trust from stockbroking or share trading in non-compliant securities and conventional insurance. Also outlawed will be investments involving hotels or resorts and some entertainment activities that include gambling or gaming, involvement in the manufacture or sale of non-halal goods and the sale of tobacco-based products.
As well as approval from unitholders, the Singapore Stock Exchange must also give its blessing.
Approvals will make the NAB-managed trust the world’s first Shariah-compliant industrial REIT and Singapore’s first publicly listed Shariah-compliant REIT.
Analysts said the industrial trust would get greater access to a new investor pool when raising capital or debt. The trust’s current portfolio consists of 43 buildings, all of which are fully leased.
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