GATEHOUSE Bank yesterday completed its first real estate financing deal, testing the waters of the sector for Sharia-compliant investors and borrowers.
The £11.7m deal funds a joint venture between Princeton Property Partners and Resolution Property, and will turn an office block in Fitzrovia into eight flats.
Islamic financing deals cannot be based on interest in the conventional sense – instead the return on the funding must be related to a more tangible underlying revenue stream, such as rent from a property.
Meanwhile, Gatehouse Bank has hired Nick Westoby from RBS, Arnaud Schaller from Credit Agricole and Eduardo Martin from Banco Popular Espanol to bolster its real estate financing unit.
Gatehouse said it has financing deal worth more than £500m in the pipeline.