Kuala Lumpur, Malaysia, June 23 2006 - Kuwait Finance House (KFH), a leading Islamic financial institution headquartered in Kuwait, through its subsidiary, Kuwait Finance House (Malaysia) Berhad (KFHMB), has teamed up with the Singapore¿based Pacific Star Group, a leading real estate investment, fund management and asset management company, to set up a US$600 million Islamic real estate fund targeted at customers within Asia.
This marks the first strategic partnership between KFH and Pacific Star. For KFH, it is even more significant, for it represents its first real estate venture in Asia . Representatives from KFHMB and Pacific Star have sealed the strategic partnership at a signing ceremony in Kuala Lumpur . KFH's share of the fund will be launched by KFHMB, through its planned subsidiary in Labuan .
The two corporations stand to leverage on each other's strengths and vast business network through this unique arrangement. Pacific Star's existing pan-Asian platform will enable and facilitate KFH's market entry into Asia and accelerate the growth of KFH's investment portfolio across the Asian region. In turn, KFH's international leadership position in Islamic banking and access to Islamic funds stands to create investment products in Asia suitable for Islamic capital.
"Our move into Asia is strategic and timely as it allows us to tap into the upward cycle in real estate values in the region driven by strong economic expansion, increasing urbanisation and growth in domestic consumption," informed Mr Jassar Dakheel Al-Jassar, General Manager of KFH, Kuwait and also Chairman of KFHMB.
"We will focus on prime locations in the residential, commercial and logistics' asset classes. Together with Pacific Star, we have identified a landmark project in Kuala Lumpur as the first investment for the fund," added Mr Jassar. Mr Benett Theseira, of the Pacific Star Group explained, "We are particularly impressed by KFH's innovative approach in developing investment products for the Islamic community. By bringing this expertise to Asia , we will be able to pursue many more opportunities for Shariah-compatible real estate investments as well as gain access to Islamic capital from the Gulf. "The Islamic capital market is indeed an important source of international funds. It has tremendous growth potential and will augment our current European and Asian investor base," he added.
Under the proposed fund structure, Pacific Star and KFH will establish and be co-sponsors of the "Baitak Asia Real Estate Fund."
In addition, KFH will act as Investment agent and Shariah advisor, while Pacific Star, through its group of companies, will provide investment advisory, fund management and asset management services.
The Fund's geographical focus will be on assets/projects in the major cities of Malaysia and some other countries in the region.
KFH is 49% owned by the Government of Kuwait and is involved in a wide spectrum of financial activities including consumer, corporate and investment banking all of which are conducted in strict compliance with Islamic Shariah.
About Kuwait Finance House (KFH)
Incorporated in the State of Kuwait in 1977, Kuwait Finance House (KFH) is listed on the Kuwait Stock Exchange. A market leader in the Islamic banking industry in Kuwait , KFH is engaged in providing Islamic banking services, including consumer banking, real estate financing, lease financing, trade finance, direct investments and portfolio investing, all of which are conducted in strict compliance with Islamic law. KFH has been accorded an upper medium grade (high creditworthiness) investment credit rating of 'A2' by Moody's Investors Service, as well as A+ by Standard & Poors and Capital Intelligence. Kuwait Finance House is one of three Islamic banks to be granted a licence from Bank Negara Malaysia last year. Subsequently, the Ministry of Finance issued the official licence to Kuwait Finance House ( Malaysia ) Berhad effective May 8, 2005. KFHMB will act as the regional hub for the expansion of KFH in the South East Asia region.
About Pacific Star Group
The Pacific Star Group is a leading real estate investment, fund management and asset management and development management services group in Asia with a premier global investor base. Since its inception in 2001, the Pacific Star Group has transacted deals in prime grade A office and retail properties in Asia valued at over US$1.6 billion. The Eureka Office Property Fund, comprising 3 prime CBD office buildings in Singapore, was established by European and Singapore institutional investors in January 2002.
This was followed by the acquisition and asset securitization of prime retail and office properties in Singapore such as Wisma Atria and Capital Square in 2002, Ngee Ann City in 2003. The Group's entry into China was marked by the acquisition of an interest in Shui On Land last year, which includes the iconic Xin Tiandi project in Shanghai and a number of other prime commercial and residential projects in Shanghai, Hangzhou and Chongqing .