Taylor Wessing advises on innovative £143 million Islamic property finance deal on landmark building

Taylor Wessing has advised a consortium including Taib Bank (Bahrain) and Dominion Asset Management (Hong Kong, represented in the United Kingdom by Pelham Associates) on the purchase of the prestigious "Sanctuary Buildings" property in London SW1. 

The deal, one of the first of its kind, was conducted in a Shari'ah (Islamic law) compliant manner and saw the "equity" being raised through two Sukuk issues (Islamic bonds) and the senior debt, provided by LTSB, invested using an innovative Musharaka structure.  Gamble & Spencer Ltd. arranged the loan.

The Musharaka is a form of partnership or joint venture between two entities whereby each party contributes to the partnership capital in equal or varying degrees to establish a new project or to share in an existing one.  Profits and losses are shared on a proportionate basis. 

The Taylor Wessing team advised on the financing and the structure of the transaction and were led by partners, Hamid Yunis and Rodney Dukes, and assisted by partner, Peter Jackson and associates, Habib Ullah and David Hugo.  Jones Day advised the consortium on the property aspects of the transaction. 

Hamid Yunis commented:

"This was an innovative transaction and was the first time this particular structure has been used.  The combination of the Musharaka and the Sukuk issues allowed our client to have all of the benefits of a traditional financing whilst remaining Shari'ah compliant.  This transaction demonstrates our strength in real estate financing as well as Islamic finance generally".

Norton Rose advised LTSB.

Linklaters advised the vendor of the property.