Australian fund manager Crescent Wealth has partnered Malaysia’s KAF Investment Funds Berhad (KAF) to launch an Islamic property fund in Malaysia – one of the largest markets for shariah-compliant
The KAF Australia Islamic Property Fund (KAIPF) aims to provide non-institutional investors with direct access to the Australian commercial property market, feeding into Australia’s leading Islamic property fund, the Crescent Diversified Property Fund (CDPF).
According to a press statement released by Crescent Wealth on August 1, the CDPF has delivered an average return of 17.9 percent per year, and a total return of 70.34 percent as at June 30, 2016, since its inception in February 2013. The CDPF invests in a mix of listed Australian REITs (real estate investment trusts), infrastructure securities and direct property assets, allowing it to deliver liquidity alongside regular income and capital growth to investors. It aims to deliver a 9–10 percent annual return to investors by targeting a 7 percent return in income yield and a 2–3 percent return in capital appreciation.
Crescent Wealth Managing Director Talal Yassine said, “We believe this new and exciting initiative builds a gateway for Malaysian investors in Australia and reaffirms strong ties between Australia and Malaysia.”
“The Australian commercial property market provides investors access to a highly-developed and deep property market with global investment-grade assets recently valued at US $ 526 billion across offices, retail, hospitals and such,” he adds.
KAF Deputy Chief Executive Officer and board member Thariq Usman Ahmad said, “We are excited to announce this latest fund addition to our product offering. In conjunction with Australia’s Crescent Wealth, we are happy to provide Malaysian investors with an opportunity to invest in the fast-growing Australian commercial property sector.”
“This sector has historically outperformed and in the current global low interest-rate environment, yields from commercial property are [becoming] increasingly attractive as an alternative. This fund will provide investors with a stable return [and] regular distribution payments with the potential upside of investments in a high-performing sector,” he adds.
Thariq claims that the CDPF is uniquely positioned to provide Malaysian investors with a chance to invest in Australian dollars, thus providing a natural hedge for those who wish to send their children to Australia for studies in the future.
Recent data from Australia’s Foreign Investment Review Board shows that Malaysia is the
fourth-largest source country for approved Australian property investment, preceded only by China, the US and Canada.
Islamic finance has been making inroads in Australia in recent years, with the National Australia Bank Ltd helping to fund a Brisbane property purchase worth A$160 million (US $ 121.76 million) in February, after its maiden Islamic-finance deal in August last year, reports Reuters. The Australian government has also proposed to remove tax barriers to similar asset-backed financing arrangements, a move that will come into effect in 2018.
Launched in 2011, Crescent Wealth is an Islamic investment firm offering a pension fund and a series of managed funds across Australian equities, international equities, diversified property and Islamic cash and fixed income. It established a new office in Kuala Lumpur late last year, seeking to expand its operations and build its network across Southeast Asia and the Middle East.
(Asia Asset Management)