2007-05-15

UNDER DECREASING PARTNERSHIP AND UMBRELLA OF RealCAPITA BAHRAIN ISLAMIC BANK FINANCES REAL SUITES

RealCAPITA, a Bahrain-based property developing company, has announced that it has signed a decreasing partnership with the Bahrain Islamic Bank (BIsB), the first Shariah-complaint bank in Bahrain, to participate in financing the US$12 million RealCAPITA construction project, which was inaugurated in December 2006.

RealCAPITA's Finance Vice President, Hasan AlMansoor, said: "This partnership is a major part of RealCAPITA strategy of business growth through the establishment of strategic partnerships with major financial institutions within and outside Bahrain. Through such partnerships, RealCAPITA is eager to meet its clients' requirements and to support the real estate sector's growth in the region. This agreement will serve as a robust platform for a strategic partnership between BIsB and RealCAPITA. We have found BIsB fully up to date with the real estate development market, as well as of our methodology and business concept. We were pleased of their ability to structure quality, flexible financing solutions and, at the same time, Shariah compliant. We hope to enhance this partnership at this time when RealCAPITA is embarking upon ambitious plans of expansion and introduction of quality diversified real estate projects in Bahrain's market."

BIsB's Head of Corporate Banking, Mr. Ali A. Karim, said: "As part of our endeavours to diversify investment services and opportunities, which we offer to our clients, apart from providing additional services for our distinguished clients, the Bank has recently created a Private Banking & Regional Marketing Section. This agreement with RealCAPITA is one of the fruitful products of the new section."

"A special feature of the BIsB-RealCAPITA agreement is that it emphasizes the strategic vision and clarity of the Bank in terms of investment finance and the correlation between such finance and the real estate development business."

As to the nature of this finance, Mr. A. Karim explained that the financing process is in the form of a decreasing partnership, which is an approved mode of Islamic financing. Under this arrangement, the Bank will enter into a US$12 million partnership with RealCAPITA. The Bank's shares will be sold gradually, over a period of three years to RealCAPITA. Thereafter, the project will become wholly owned by RealCAPITA. However, under the partnership arrangements, the Bank will mandate RealCAPITA to manage the project as per the pre-approved drawings and plans.

BIsB's Shariah-compliant partnerships stem from the Bank's firm belief in the importance of developing such financial instruments and of involving the private sector in property development. The Bank currently endeavours to expand on Islamic financing, with the intention of covering local, regional and international markets.

The Real Suites Project of prestigious residential towers was started by RealCAPITA last December in Bahrain. RealCAPITA has begun developing two 12-story residential towers in Um Al-Hassam, Manama, on an area of 14,510 square feet at a total cost of US$12 million. The towers will comprise 68 fully furnished residential units of various sizes. The towers will include recreational facilities such as swimming pools, squash courts, gymnasiums, etc.