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Islamic Real Estate Investment TrustsIslamic Real Estate Investment Trusts
(IREIT)(IREIT) –– Shariah PerspectiveShariah Perspective
By: Dr. Muhammad Imran UsmaniBy: Dr. Muhammad Imran Usmani
Shariah Advisor Meezan Bank Ltd.Shariah Advisor Meezan Bank Ltd.
2
Presentation Overview
Islamic REITs Differentiating Features
Shariah Principles
Islamic REITs Differentiating Features
Possible sources for Financing the
funds
Equity
Shariah Complaint Leverage
Assets
Purchase property & renting it out.
3
Islamic REITs Differentiating Features
Usage of Property
Halal
Lease Agreement should be Shariah compliant
Income
Rentals
Capital Gains (Appreciation in property value)
Islamic REITs Differentiating Features
Types
Open Ended
Closed Ended
4
Islamic REITs - Shariah Principles
Prohibition of leasing property to
‘Unacceptable Tenants’ defined as:
Entities with primary business related to
alcohol, pork, pornography and gambling
products
Operators of gambling casinos
Operators of movie theaters
Hotels
Islamic REITs - Shariah Principles
Leasing of properties to institutions like
insurance companies and conventional
banks is ‘Undesirable’.
All liquid cash shall be held in Shariah
compliant investment accounts.
If any financings are to be raised for the
acquisition of Properties, such financings
shall be raised through Shariah Compliant
modes
5
Islamic REITs - Shariah Principles
Prohibition of using any derivatives and
instruments involving interest receipts &
payments including:
Future contracts
Option contracts
Swaps
Short sales
THANK YOU

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Alhuda CIBE- Presentation on Islamic Real Estate Investment Trust

  • 1. 1 Islamic Real Estate Investment TrustsIslamic Real Estate Investment Trusts (IREIT)(IREIT) –– Shariah PerspectiveShariah Perspective By: Dr. Muhammad Imran UsmaniBy: Dr. Muhammad Imran Usmani Shariah Advisor Meezan Bank Ltd.Shariah Advisor Meezan Bank Ltd.
  • 2. 2 Presentation Overview Islamic REITs Differentiating Features Shariah Principles Islamic REITs Differentiating Features Possible sources for Financing the funds Equity Shariah Complaint Leverage Assets Purchase property & renting it out.
  • 3. 3 Islamic REITs Differentiating Features Usage of Property Halal Lease Agreement should be Shariah compliant Income Rentals Capital Gains (Appreciation in property value) Islamic REITs Differentiating Features Types Open Ended Closed Ended
  • 4. 4 Islamic REITs - Shariah Principles Prohibition of leasing property to ‘Unacceptable Tenants’ defined as: Entities with primary business related to alcohol, pork, pornography and gambling products Operators of gambling casinos Operators of movie theaters Hotels Islamic REITs - Shariah Principles Leasing of properties to institutions like insurance companies and conventional banks is ‘Undesirable’. All liquid cash shall be held in Shariah compliant investment accounts. If any financings are to be raised for the acquisition of Properties, such financings shall be raised through Shariah Compliant modes
  • 5. 5 Islamic REITs - Shariah Principles Prohibition of using any derivatives and instruments involving interest receipts & payments including: Future contracts Option contracts Swaps Short sales THANK YOU