Wealth Management SIB Academy

Real Estate

Rated amongst the major real estate Islamic financers

in the UAE, SIB has set its strong determination and

commitment to an unrelenting pursuit of its Real Estate

goals. We play a major role in supporting commercial

real estate developments with an emphasis on

financing the acquisition and construction of all types

of commercial residential and industrial properties

across the UAE.

Istisna'a is a Sharia’a mode of financing widely used by Islamic banks and financial institutions to finance the construction of buildings, residential towers, villas and related products, and manufacturing of aircrafts, ships, machines and equipment, etc.

The Arabic word "Istisna'a" means "asking someone to manufacture". It may be further defined and elaborated as a sale contract between the seller and the buyer for the sale of an asset described in the sale contract and transacted before it comes into existence. To fulfill its obligation, the seller can either manufacture/construct it by itself or can get it manufactured/constructed by someone else to deliver it to the buyer on the date described in the sale contract. The buyer can pay the sale price in lump sum at the time of signing the contract or later in different stages as the manufacturing/construction process proceeds.

We adopt Istisna’a mode of financing to fulfill your financing requirements in relation to properties, buildings, and villas, etc. Following is a brief outline of this mechanism. If you own, or have a usufruct of, a plot of land and want to construct a property on it and need financing for this purpose, we will sign an Istisna’a agreement with you to sell the property and then construct the building as per your specifications at our own cost and will get the sale price from you on a deferred payment basis.

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Terms of Financing

 

Type of Property: Freehold
Cash Contribution: Minimum of 50% of total Project Cost (40% upfront cash + 10% open Market Value of Land)
Finance Tenor: 8 years including
Mode of Repayment: Monthly, Quarterly, Semi-annual or Annual terms are available
Sources of Repayment: Primary: Rental income of the project. Secondary: Other incomes
Profit Rate: Fixed throughout the financing period
Security: First degree registered mortgage on the plot and the building, in addition to the other terms of approval
Insurance: Insurance policy covering the property under construction to be assigned to the Bank
Qualified Assets: Residential, Office Buildings & Villa Complexes

 

The required documents are the original passport and UAE National ID, Valid Residence Visa (Expatriates), Full details of personal financial information supported with documents, six months bank statement, copy of site plan, copy of title deed, comprehensive Feasibility Study prepared by reputed consultant, project specification and approved drawings, copies of the consultant / contractor agreements & copy of approval of electricity connection date.

 

 

 

Forward Ijarah is a form of partnership/lease agreement which ends with transferring the ownership of the asset (subject of the contract) to the client on maturity and upon meeting all its obligations under the Forward Ijarah Contract.

Subject of the Contract, be it full share or common share of a property, which does not exist at the time of signing the Forward Ijarah Contract, may be acquired by the bank under Istisna’a Sale Contract or any other Sharia’a compliant mode of finance.

However, the client may be a partner in a project (the property) contributing by its land and cash as its share in the partnership, whilst the bank’s share will be finance disposed for construction, hence, the Bank will be having common share of such property which will form subject of the Forward Ijarah Contract.

In any case, on completion of construction, and based on your request and promise to lease the asset, the Bank, who has accepted such offer according to the terms and conditions set out in the Forward Ijarah, will lease the asset/its share in the asset to you and will receive agreed rentals.

At the end of the lease period (i.e. on maturity) and upon meeting all your obligations under Forward Ijarah Contract, we will transfer the ownership of the property to you for a nominal sale price under a separate sale contract.

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Terms of Financing

 

Type of Property: Freehold.
Cash Contribution: Minimum of 50% of total Project Cost (40% upfront cash + 10% open Market Value of Land)
Finance Tenor: 10 years including up to two years construction period.
Mode of Repayment: Monthly, Quarterly, Semi-annual or Annual terms are available
Sources of Repayment: Primary: Rental income of the project. Secondary: Other incomes.
Floating Rentals: Relevant EIBOR + bank’s margin with a minimum of certain rate.
Security: First degree registered mortgage on the plot and the building, in addition to the other terms of approval.
Insurance: Insurance policy covering the property under construction to be assigned to the Bank.
Qualified Assets: Residential, Office Buildings & Villa Complexes.

 

The required documents are the original passport and UAE National ID, Valid Residence Visa (Expatriates), Full details of personal financial information supported with documents, six months bank statement, copy of site plan, copy of title deed, comprehensive Feasibility Study prepared by reputed consultant, project specification and approved drawings, copies of the consultant / contractor agreements & copy of approval of electricity connection date.

 

Ijarah is a form of leasing where a property (commercial building / complex of villas, etc.) is leased by the leaser to the lessee in a way that at the end of an agreed lease period, the lessee becomes the owner of the property by purchasing it from the leaser during or at the end of the lease period at an agreed sale price.

Applying the above, upon your promise to lease from us, we purchase, for ourselves and in our own name, a property specified in your promise and then lease it to you on terms of financial lease. The lease rent is structured in a way that at the end of the lease period, our purchasing cost and profit is recovered and we transfer the ownership of the property to you for a nominal sale price or as a gift by a separate sale or gift contract at the end of the lease period.

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Terms of Financing

 

Type of Property: Freehold
Advance Rent: Minimum 50% of the purchase price
Finance Tenor: Up to 6 Years
Age of Property: Should not exceed 20 years including the repayment tenor
Mode of Payment: Monthly, Quarterly, Semi-annual or Annual terms are available
Sources of Repayment: Primary: Rental income of the project. Secondary: Other incomes
Floating Rentals: Relevant EIBOR + bank’s margin with a minimum of certain rate
Security: First degree registered mortgage on the plot and the building, in addition to the other terms of approval
Qualified Assets: Residential, Office Buildings & Villa Complexes

 

The required documents are the original passport and UAE National ID, Valid Residence Visa (Expatriates), Full details of personal financial information supported with documents, six months bank statement, copy of site plan, copy of title deed, & details of construction completion certificate and rental income in case of building (supported with copies of tenancy contracts).

 

Literally, Murabaha means selling on profit. The Sharia'a compliant application of this term is as follows

A purchaser approaches a seller, provides the details of goods he wants to purchase from a supplier and promises the seller that he will purchase the goods from him at a price, which will include the cost of the goods incurred by the seller plus an agreed fixed amount or percentage of profit. The seller then purchases the goods for himself in his own name and sells it to the purchaser on the terms already agreed upon. It must be always kept in mind that the ownership of the goods during the period from purchasing it from a supplier and selling it to the purchaser, irrespective of the span of that period, lies in name of the seller and he bears full risk as the owner of the goods during that period.

Applying this mechanism, we purchase a plot of land / property as per your specifications and your promise to purchase is from us on a deferred payment basis. For this purpose, a Murabaha agreement is signed, the ownership of the land transfers to you and we obtain a security / guarantee from you to ensure prompt and timely payment of the installments due from you as per the Murabaha terms.
Details of the terms under which this product is offered are outlined below:

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Terms of Financing

 

Type of Property: Freehold.
Dhaman Jedyiah: Minimum 50% of the purchase price
Finance Tenor: Up to 6 Years
Mode of Repayment: Monthly, Quarterly, Semi-annual or Annual terms are available.
Sources of Repayment: Business cash flows, rentals from other properties.
Profit Rate: Fixed throughout the financing period.
Security: First degree registered mortgage on the land, in addition to the other terms of the approval.

 

The required documents are the original passport and UAE National ID, Valid Residence Visa (Expatriates), Full details of personal financial information supported with documents, six months bank statement, copy of site plan, copy of title deed, & details of construction completion certificate and rental income in case of building.