Shojin has successfully structured and funded our first Sharia compliant real estate investment for a residential development in Greater Manchester. We will continue to cater for global investors seeking Sharia compliant opportunities in the UK market, particularly as real estate is one of the UK's largest and most stable asset classes.
The project
The investment involved a mezzanine funding package for a 250-unit residential development in Salford with a net development value of £69.5 million. The investment was split between our traditional bond investment structure (£2 million funded) and a Sharia compliant Commodity Murabaha structure (£2.2 million).
This approach aligns with broader market trends, as real estate continues to be one of the most popular categories for Sharia compliant investments globally (as per Investopedia), with notable UK examples including The Shard and Chelsea Barracks, both acquired by Qatar's sovereign wealth fund using Sharia-compliant structures.
Why this matters
This is a notable step for Shojin as we expand our products to serve diverse investor needs:
- Access to Sharia investments: We will continue to provide our global investors with access to Sharia compliant real estate opportunities in the UK market and beyond.
- Effective structure: The Commodity Murahaba structure was developed with industry experts to ensure Sharia compliance.
- Market size and growth potential: With the Islamic finance market expected to reach $6.67 trillion globally (as per LSEG) and the UK market projected to reach $9.02 billion by 2030 (as per Mordor Intelligence), this represents a significant opportunity.
The Sharia compliant structure
The Sharia compliant portion of this investment was structured as a Commodity Murabaha transaction involving the sale and purchase of palladium. This approach adheres to Islamic financial principles while providing investors with exposure to the UK property market.
We worked with several partners including law firms CMS and Freeths, London Metal Exchange brokers, and Sharia scholars to create a framework that can be replicated for future investments.
Looking forward
This project establishes a foundation for future Sharia compliant investments. We're exploring collaboration opportunities with other platforms to make both UK and international real estate projects accessible to global clients seeking Sharia compliant investment options.
The UK is positioned as a leading Western hub for Islamic finance with over 600 Sharia compliant stocks listed on the London Stock Exchanges (as per Islamicly).
Shojin continues to focus on providing access to real estate investments for our investor community across 62 countries. This development adds to our capabilities as a capital provider to the mid-market residential property development sector.
For more information about future Sharia compliant investment opportunities, please contact our Investment team via invest@shojin.co.uk.
