- Bricklane's geographically-focussed residential property funds receive Shariah accreditation
- Bricklane now provides new bricks-and-mortar investment options for Islamic investors, a group that typically faces a highly restricted investment universe centred around Islamic bonds and a minority of equities
- Bricklane's funds contain no debt and offer flexible, hassle-free tax-efficient exposure to residential property in a structure that is eligible for ISAs and SIPPs
Bricklane, the residential property investment platform backed by Zoopla, today announces a new Shariah accreditation for its REITs, allowing Islamic investors to transact with the knowledge that these investments comply with Shariah standards.
Bricklane's funds have been certified as compliant by the Shariah Committee of Minarah Consulting chaired by Sheikh Faizal Manjoo.
Bricklane's funds join a small but growing universe of UK investment products with a Shariah certification. UK investors typically face a highly restricted set of Shariah investment options, particularly in ISAs or SIPPs, with minimal asset-class diversification. The majority of Shariah-compliant managed portfolios exhibit a strong equity bias leaving investors with few lower-risk and asset-backed options.
Bricklane's funds use no debt financing involving interest, which is a key consideration for Shariah compliance, but which is atypical for real estate asset managers who typically seek to leverage returns, increasing the level of risk associated. Performance for the Bricklane funds has been strong in both absolute and relative terms, with the Regional Capitals fund returning 8.7% to investors in its first year, and its London fund returning 10% at its first anniversary in July 2018. Bricklane has previously highlighted a soft London property market that had favoured its highly data-driven and opportunistic acquisition strategy.
There have been few new Shariah-compliant product launches, particularly in alternative-asset categories, despite the UK being at the forefront of innovation in Islamic finance in recent years as the first non-Muslim majority country to issue a sovereign Islamic bond in 2014.
Simon Heawood, Founder and CEO of Bricklane.com commented:
"We are delighted to have received this Shariah accreditation and hope our property funds help plug a gap for Shariah investors who want straightforward, flexible exposure to residential property – whether as a tax-efficient route into the property market, or as a means of diversifying their existing investments.
"There is a small number of options open to Shariah-focused investors, typically limited to a restricted list of equities and Islamic bonds. Since we launched, we have seen a steady stream of interest from Islamic investors as our bricks-and-mortar funds have grown their performance track-record and as heightened volatility in the financial markets has prompted investors to look for more defensive options."
Through Bricklane's online platform, individuals can invest flexibly in geographically focussed funds that buy and let residential properties – one focussed on London, and another on the Regional Capitals of Leeds, Manchester and Birmingham. Available through ISAs and SIPPs, and with Real Estate Investment Trust (REIT) tax status, it is the most tax-efficient way to invest in UK residential property.
Commenting on the accreditation, Islamic scholar Faizal Manjoo stated:
"This new product will help in enhancing shariah-based investment portfolios for investors seeking ethical and Shariah-compliant investments. The REITS are linked to the real economy and generate returns from rentals and capital gains which are accepted by the consensus of Muslim jurists"
Those interested in investing in bricks and mortar in a Shariah compliant way can either transact directly via Bricklane.com, or by contacting their financial adviser.