The Kuwait-based Warba Bank has announced acquisition of the new headquarters of British Telecom located in the town of West Bromwich in the UK for $33 million.
This is in-line with their acquisition in New York a couple of weeks ago in which they announced the conclusion of a financing deal to purchase a property and develop it into a multi-family residential complex by Criterion Group based in New York. A total of 24 percent of the stocks of this bank is held by Kuwait Investment Authority (KIA).
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More details on both real estate transactions follows
Warba Bank announced today the acquisition of the new headquarters of British Telecom (BT) located in the town of West Bromwich in the UK, which was officially opened in February 2012. The building benefits from a new 15-year lease to BT.
"Since establishment, the bank's strategy was defined and then approved by the board of directors with the help of one the biggest consultancy firms. Accordingly, several investment opportunities were studied and the best were seized. This substantial transaction marks one of them, and reflects Warba Bank's competency and capability to conclude successful investments generating ongoing returns and cash flows at a carefully considered risk profile. This achievement is in line with our vision aiming at building an investment base which is lucrative for the Bank and its shareholders on medium to long-term basis," said Mr. Jassar Al-Jassar, Chairman and Managing Director of Warba Bank.
The building enjoys excellent characteristics and is distinguished by its unique and award-winning design. It provides long-term income and a security of a world class covenant for Warba Bank. The transaction delivers an annual cash yield of 8%, and is expected to generate an internal rate of return of more than 10%. Given its experience and reputation in this field, London-based Gatehouse Bank plc has been appointed as an adviser for the transaction.
The British Telecom building is located in the center of West Bromwich, just five miles north-west of Birmingham, the second largest city in the UK after London. The building is compliant with the latest international superior standards, and benefits from the reputation of the tenant.
Moreover, the building is located in a rapidly growing region; where the global retailer "Tesco" is building a GBP200m shopping center near BT building. Further, several new public buildings; such as the "University of Sandwell", worth GBP77m, and a new police station at a cost of GBP10m are currently under constructed. All these factors will contribute to improving the infrastructure, which in turn will attract several new investments and support the local economic growth.
In an earlier statement, Geffen Patterson, BT Board Member and Chief Executive of BT's Retail Division, said, "This state-of-the-art office building is a giant leap forward for the West Midlands, creating much needed jobs and prosperity at a time of economic uncertainty. This show what can be achieved when the public and private sectors work together in partnership."
Warba Bank (WB) announced the conclusion of a financing deal to purchase a property and develop it into a multi-family residential complex by Criterion Group LLC based in New York. WB has financed the purchase of the land, as well as the development of residential building in Long Island, Queens County, New York, 5 minutes from midtown Manhattan by subway, providing distinctive proximity advantages.
The Project is strategically located opposite of Citibank Queens Operations headquarters, MetLife Operations headquarters, Tishman Speyer's Gotham Center, and the UN Credit Union Building.
The Court Square development will consist of approximately 155 apartment units with high-end finishes, spacious interiors and large private balconies with Manhattan skyline views. Warba Bank indicated that the total financing is approximately USD 20 million and the bank expects generating a 12% annual return. The financing deal is expected to last for 30 months. The financing is the first sharia compliant financing transaction that is recognized as a building loan contract by the NY statute; this effectively means that the mortgage is superior to the subcontractor liens as well and thereby provides utmost level of security to the financier.
Commenting on the project, Hosam Nasser Al Muzaiel Investment Manager, Warba Bank, said: "We are enthusiastically pleased with the conclusion of this significant deal which accentuates the competencies of Warba's Investment Team in concluding important deals with companies and institutions, locally, regionally or internationally. The conclusion of the first Sharia-compliant deal for construction financing purposes in the USA marks extraordinary step towards the development of Warba Bank and towards continued growth of Islamic finance."
Moreover, he said,
"Warba Bank is going forward with its plans that aim at taking advantage of unique investment opportunities, based on its strong fundamentals and extensive networking in the US market. The deal demonstrates the bank's expertise to originate, execute and manage innovative Sharia-compliant investments that would deliver solid returns in the short and medium terms."
"We are keen on channeling all our efforts to take our financial and operational performances to higher levels and position the bank uniquely in the market, whilst entering new phases of development and continued prosperity," he concluded.
It is worth mentioning that Warba Bank provides a remarkable opportunity for investors and depositors to secure exposure to and participate in innovative asset classes, well diversified and with best in-class returns generated through superior quality projects.
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