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Kuala Lumpur, Malaysia, 29 November 2007 - Kuwait Finance House (Malaysia) Berhad (KFHMB) has entered into an agreement to provide Corner Side Realty Sdn Bhd (CSRSB) a Mudharabah Financing Facility amounting to RM74.7 million.
Mudharabah is a common mode of Shariah-based financing using the concept of profit sharing. It refers to a partnership whereby one partner provides capital (rabb al-mal) and the other partner acts as an entrepreneur (mudharib) who solely manages the capital in a project approved by the rabb al-mal.
With the Mudharabah Financing Facility from KFHMB, CSRSB shall enter into an underwriting arrangement with the developer, B. U. Developments Sdn Bhd, to underwrite the sale of 30 units of bungalow properties on a freehold land area located at Batu Uban, Pulau Pinang. The Units are part of Parcel 1B of the development on a 28 acres freehold gated residential project known as The Sanctuary.
The underwriting arrangement stipulates that any profit arising on the eventual sale of the bungalow units to end-purchasers will be distributed between KFHMB and CSRSB based on a predetermined profit sharing ratio.
This transaction represents another milestone for KFHMB as it marks the first Mudharabah structure in Penang. It also reflects the bank's move outside of Kuala Lumpur where the KFHMB name is synonymous with landmark projects like The Pavilion, The Avare and The Oval.
Dato' K. Salman Younis, Managing Director of KFHMB says, "We are pleased that the management of CSRSB has chosen Kuwait Finance House ¿ Malaysia to provide this Mudharabah facility. This arrangement reflects the commitment of Kuwait Finance House ¿ Malaysia in increasing its investment in Penang and to further develop our presence in the state."
Commenting on its first Mudharabah financing facility, Dato' Mohd Ramzan Ibrahim, Managing Director of Prima Prai Group says "We are indeed honoured and pleased to be the first residential development in Penang to be associated with Kuwait Finance House (Malaysia) Berhad. This association bears testimony to the confidence accorded by Kuwait Finance House ¿ Malaysia, The Sanctuary, as well as the Management of the company."
The Mudharabah arrangement is an innovative Islamic financial instrument which allows selected developers to focus on the core development activities via the Mudharabah partnership arrangement with KFHMB.
"This provides a win-win situation for both parties as Corner Side Realty will be able to focus on the development of the property and Kuwait Finance House will be able to assist Corner Side Realty to market the units via their international network," declares Dato' Ramzan.
The property development project known as The Sanctuary comprises 689 units of luxurious bungalows, semi-detached homes, town villas and high-end condominiums within a gated residential enclave. The Sanctuary is strategically located within the Batu Uban Growth Triangle, along Jalan Sultan Azlan Shah, Daerah Timur Laut and in the midst of a myriad of recreational, shopping, medical and educational facilities.
Developed by B. U. Developments Sdn Bhd, a member of the Prima Prai Group, The Sanctuary is a gated and guarded hillside enclave of limited edition featuring three storey bungalows. These residences are designed to suit the natural terrain and to tantalise luxury-seekers with its panoramic views of the sea and the Penang Bridge and be inspired by tranquil and picturesque surroundings. These modern tropical homes here exudes warmth and harmony, portrays luxury and comfort and reflecting the values of the Asian way of life.
Mudharabah is a common mode of Shariah-based financing using the concept of profit sharing. It refers to a partnership whereby one partner provides capital (rabb al-mal) and the other partner acts as an entrepreneur (mudharib) who solely manages the capital in a project approved by the rabb al-mal.
With the Mudharabah Financing Facility from KFHMB, CSRSB shall enter into an underwriting arrangement with the developer, B. U. Developments Sdn Bhd, to underwrite the sale of 30 units of bungalow properties on a freehold land area located at Batu Uban, Pulau Pinang. The Units are part of Parcel 1B of the development on a 28 acres freehold gated residential project known as The Sanctuary.
The underwriting arrangement stipulates that any profit arising on the eventual sale of the bungalow units to end-purchasers will be distributed between KFHMB and CSRSB based on a predetermined profit sharing ratio.
This transaction represents another milestone for KFHMB as it marks the first Mudharabah structure in Penang. It also reflects the bank's move outside of Kuala Lumpur where the KFHMB name is synonymous with landmark projects like The Pavilion, The Avare and The Oval.
Dato' K. Salman Younis, Managing Director of KFHMB says, "We are pleased that the management of CSRSB has chosen Kuwait Finance House ¿ Malaysia to provide this Mudharabah facility. This arrangement reflects the commitment of Kuwait Finance House ¿ Malaysia in increasing its investment in Penang and to further develop our presence in the state."
Commenting on its first Mudharabah financing facility, Dato' Mohd Ramzan Ibrahim, Managing Director of Prima Prai Group says "We are indeed honoured and pleased to be the first residential development in Penang to be associated with Kuwait Finance House (Malaysia) Berhad. This association bears testimony to the confidence accorded by Kuwait Finance House ¿ Malaysia, The Sanctuary, as well as the Management of the company."
The Mudharabah arrangement is an innovative Islamic financial instrument which allows selected developers to focus on the core development activities via the Mudharabah partnership arrangement with KFHMB.
"This provides a win-win situation for both parties as Corner Side Realty will be able to focus on the development of the property and Kuwait Finance House will be able to assist Corner Side Realty to market the units via their international network," declares Dato' Ramzan.
The property development project known as The Sanctuary comprises 689 units of luxurious bungalows, semi-detached homes, town villas and high-end condominiums within a gated residential enclave. The Sanctuary is strategically located within the Batu Uban Growth Triangle, along Jalan Sultan Azlan Shah, Daerah Timur Laut and in the midst of a myriad of recreational, shopping, medical and educational facilities.
Developed by B. U. Developments Sdn Bhd, a member of the Prima Prai Group, The Sanctuary is a gated and guarded hillside enclave of limited edition featuring three storey bungalows. These residences are designed to suit the natural terrain and to tantalise luxury-seekers with its panoramic views of the sea and the Penang Bridge and be inspired by tranquil and picturesque surroundings. These modern tropical homes here exudes warmth and harmony, portrays luxury and comfort and reflecting the values of the Asian way of life.
