41 George Street sold in Shariah-compliant deal 

Singapore-based AEP Investment Management has acquired a B-Grade office tower in Brisbane’s CBD for $159.8 million in an innovative property deal.

The 30,000 sqm property, positioned at the gateway of the $2 billion Queens Wharf precinct, attracted strong market interest due to its location within an emerging entertainment hub.

The 27-storey office tower, purchased by the Queensland Investment Corporation (QIC) from the Queensland Government in 2013, is currently fully-leased back to the government until 2222.

The sale was part of QIC’s review of its $14.8 billion property portfolio, and was brokered by Colliers International’s Tom Phipps and Jason Lynch, and Chesterton International’s Shaun Douglas and Ken Lucht.

Basil Property Trust, a Shariah-compliant, cross-border business space fund managed by AEP Investment Management, purchased the property, with law firm Norton Rose Fulbright acting on behalf of the Trust.

“The fact that the Basil Property Trust is a Shariah compliant fund made the debt and derivative work particularly innovative, as the loan was one of the few Shariah compliant facilities for a property purchase in Australia,” says Norton Rose Fullbright’s Brisbane partner, Michael French.

A Shariah-compliant fund meets all of the requirements of Shariah law, and follows a variety of rules: investing only in Shariah-compliant companies, appointing a Shariah board, carrying out an annual Shariah audit and purifying certain prohibited types of income, such as interest, by donating them to a charity.

Thomson Reuters, in its 2015 Global Islamic Asset Management Outlook, argues that Islamic funds will grow to at least US$77 billion by 2019, with latent demand for Islamic funds projected to grow to US$185 billion.

The report finds substantial growth opportunities as the industry struggles to bridge the US$108 billion demand-supply gap.