ADIB says UK commercial property funding hits $127m

WAM

Abu Dhabi Islamic Bank (ADIB), the biggest Sharia-compliant lender by assets in the UAE, added £100 million ($127.3 million) to its UK commercial real estate financing portfolio in the first six months of 2023.

Closed deals include structured financing for projects, such as a 343-unit co-living scheme in North Acton, West London, a 400-room hotel at Gatwick Airport, a 133,000 sq ft grade A multi-let office campus in Guildford and a 153,000 sq ft national HQ office campus in Newport, Wales.

ADIB has been able to offer selective Islamic structured financing solutions, facilitating both refinancing and new acquisitions, state-run Wam news agency said.

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The growth in lending has come despite the UK’s commercial real estate market reporting a substantial correction in capital values over the last 12 months due to higher interest rates impacting investment activity.

ADIB has closed senior financing transactions of over AED3 billion in the last five years. Its London-based team provides financing support and advisory services for GCC clients seeking commercial and residential property investments across the UK.

According to Capital Economics, average capital values declined by 12.6 percent during 2022.

In April, net financing to UK commercial real estate (including developments) reached £1.2 billion, up 137 percent month-on-month and its highest level since December 2021, according to the Bank of England.

Last month ADIB reported a 61 percent increase to AED1.17 billion in net profit for the second quarter of 2023 after revenue from funds rose on higher interest rates.