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Elite UK REIT secures £50M sustainability-linked Islamic loan
The Sterling-denominated Murabaha facility will fund Elite’s acquisition of a five-building UK portfolio and refinance existing debt, with £22M already drawn.
Elite UK REIT has secured a £50 million first-of-its-kind Sterling-denominated, sustainability-linked Sharia-compliant loan to finance a UK portfolio acquisition and refinance part of its debt, according to a stock market filing reported by Bisnow.
The financing is structured as a Murabaha facility with Malayan Banking and RHB Bank, using an Islamic finance structure designed to avoid interest payments, which are prohibited under Sharia law. The loan repayments are also reduced if the properties backing the debt meet targets for cutting energy usage, aligning with Elite’s sustainability-linked approach.
So far, £22 million of the facility has been drawn to support the £32 million purchase of a five-building portfolio leased to HM Revenue and Customs. The properties, Queensway House, East Kilbride; Griffin House, Wigan; Penhaligon House, St Austell; Challand House, Pontefract; and Bridgend Jobcentre, Bridgend, generate £2.6 million in annual rental income and have a weighted average unexpired lease term of 13 years.
Elite said the deal is the first time it has bought assets leased to HMRC and that it is working to diversify beyond government-leased offices, including converting a building in Dundee to student accommodation and building a data centre in Blackpool. Elite CEO Josh Liaw said the GBP-denominated Murabaha facility helps the Singapore-listed REIT access Islamic financing while keeping borrowings aligned with its currency of assets and income.