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23 / 02 / 2015

Seera Successfully Completes $40 Million Exit from UK Investment with 50% ROI

(Manama, Monday, 23 February 2015) Seera Investment Bank B.S.C.(c), a Shari’a compliant investment bank headquartered in Bahrain, announced that it had successfully exited a Shari’a compliant financing transaction”) to develop a student accommodation property in London, UK. The financing generated for Seera a total return on investment of around 50% over a holding period of two and a half years and an IRR close to 20% .

The transaction closed in 2012 and comprised a Shari’a compliant structured financing facility for a new purpose built student housing project and commercial property in central London. The property consists of 346 student rooms and 37,000 sq. feet of commercial space and has been fully let on a long term basis to a prominent higher education institution.  The prevailing  favorable property valuations helped in completing this successful exit.

Mr. Hamad Al Ameeri, Seera’s Chairman of the Board of Directors commented “We are very pleased with the successful exit from this transaction. Our investment was underpinned by a strong belief in the fundamentals of the UK student housing sector given the persistent demand supply gap for purpose built student housing in the UK, the property’s prime location, attractive investor returns, relatively short investment tenure and the deal’s favorable risk profile.” added Mr. Al Ameeri.

“We believe that completion of this exit further establishes  Seera’s track record and credibility in the Bank’s sound investment strategy and we are very positive on the growth and success of Seera with other similar investments.” Mr. Al Ameeri further added.

Mr. Abdulla Janahi, Seera’s Chief Executive Officer commented “We are especially pleased with this exit as the transaction exceeded our initial expectations and generated an IRR of close to 20% vs. our original conservative projections of around 15%. Investors also received steady yields of 8.5% per annum which was paid quarterly throughout the investment holding period.”

“When structuring the transaction, we focused on mitigating risks relating to income payments and investor capital.  The construction was on schedule and to very high specifications and the property achieved near full occupancy from the first year. Moreover, a long term lease was achieved with a major international business school adding to the investment appeal of the property” Mr. Janahi further commented.

On Seera’s value addition he said “During the investment holding period, the property value grew by nearly 40% as a result of several value add measures including increasing the number of rooms and successfully achieving a long term lease with a reputable institution.  These measures along with the timing of the exit and the favorable market conditions have helped achieve these exit returns.”

He further added “Seera’s strategy is to invest in deals with strong fundamentals and in industries which are not highly cyclical. We place high importance on risk governance and focus on investments which meet our risk return tradeoff  and are within Seera’s risk threshold in the foreseeable economic environment.”

Seera has investments in the industrial manufacturing and transportation sectors in addition to smaller investments in the utilities and affordable housing sectors. The Bank’s investment strategy is to maintain a diversified investment portfolio geographically and industry wise, focusing mainly on defensive sectors underpinned by strong fundamental demand.

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