The Banking Executive Magazine - August 2023 Issue

ADIB ADIB POSTS STRONG H1 GROWTH WITH UK REAL ESTATE FUNDING Abu Dhabi Islamic Bank (ADIB) has announced that it has continued to grow its UK commercial real estate financing portfolio with over £100 million ($127.3 million) in new fi- nancing assets in the first six months of this year. Their closed deals include providing structured financing for various proj- ects, such as a 343-unit co-living scheme in North Acton, West Lon- don, a 400 key hotel at Gatwick Air- port, a 133,000 sqft Grade A multi-let office campus in Guildford and a 153,000 sqft national HQ of- fice campus in Newport, Wales. ADIB said it has been able to offer selective Islamic structured financing solutions to its clients, facilitating both refinancing and new acquisi- tions. These achievements have come amidst a challenging UK Commer- cial Real Estate market, which has experienced a significant correction in capital values over the last 12 months, largely due to adjustments in the higher rate environment, impact- ing investment activity, said the Abu Dhabi lender. The bank witnessed a strong empha- sis on the sustainability and growth prospects of rental income, which drives returns and services debt. Consequently, robust investor de- mand for the 'Living score favourably on the criteria of the real estate assets and contribute to fuel substantial rental Sectors', particularly in high- quality purpose-built student accom- modation (PBSA) and build-to-rent (BTR) assets, have contributed to in- come growth. With a strong track record in offering bespoke sharia-compliant property financing solutions for its clients in the UK, ADIB has closed senior fi- nancing transactions over AED3 bil- lion ($816 million) in the last 5 years. The bank’s London-based team is of- fering financing support and advisory services for GCC clients looking for commercial and residential property investments across the UK. According to Capital Economics, av- erage capital values saw decline by 12.6% during 2022. Despite this backdrop, commercial real estate fi- nancing remains active. In April 2023, net financing to UK commercial real estate (including de- velopments) reached £1.2 billion, up 137% month-on-month increase and its highest level since December 2021, according to the Bank of Eng- land the BANKING EXECUTIVE 30 ISSUE 176 AUGUST 2023