UAE nationals take to timeshare sukuks

Muslim investors from around the world, especially the GCC countries, are keenly buying Islamic time share schemes or ‘sukuks’ in properties near the Grand Mosque in the holy city of Makkah.

During this Hajj season, many UAE nationals will be staying in the time share properties that they invested in close to Grand Mosque.

The timeshare concept has spread to the holy city of Makkah, attracting pious investors from around the world, for a week’s ownership of properties in residential towers offering different views of the Holy Kaa’ba, real estate agents handling such schemes told Emirates 24/7.

Abdullah J Al Shehab, marketing manager, Mas International Company, said: “We have nearly 15,000 Muslim investors from around the world who have purchased sukuks ranging from $4,000 to $300,000. From the UAE alone, we have more 4,000 investors who have invested in the sukuk scheme in Hajar Tower located within the Abraj Al Beit Complex, the biggest Islamic endowment of King Abdul Aziz Al Saud in Makkah.”

“Only twenty per cent of our investors have bought the sukuks for commercial purposes and the rest have invested mainly for their own use,” Al Shehab said.

He said there are four companies like his that have sold Islamic timeshare products.

Recent reports suggest that there has been a 20 per cent drop in rents near Makkah, as the number of pilgrim visas has been slashed from four million last year to 2.5 million this year.  As there is a 20 per cent cut in the number of foreign pilgrims for Hajj in 2013, some hotels have quite a number of vacant rooms. The number of Saudi pilgrims will also be lower this year.

People who have purchased timeshare properties in the Abraj Al Bait project are long term investors. They can stay in the property for one week during the peak season or lease it out to other pilgrims.

Ibrahim Khalil, Assistant General Manager (Sales and Marketing) of Fanar Al KhaleejProperties, Abu Dhabi, said: “Muslims from all over the world, especially the GCC countries, want to own a place in the holy city. They can stay in the property during the peak Hajj or Umrah seasons when rents normally go up or lease their sukuk property to other pilgrims. In many cases, we will be managing their properties and offering them rent for the period.”

Most of the investors in the sukuks are GCC nationals while 20 per cent of them are from Asian countries like Indonesia and Malaysia. They can use the timeshare for one week for 21 years or lease it to other pilgrims.

He said Muslim investors who have purchased timeshare in the Al Hajar Tower facing the Kaa’ba are getting 7 per cent return on investment and many of them have signed special contracts with the real estate company to manage the time share by subletting to other Hajj pilgrims.

“This year the number of pilgrims performing Hajj has come down substantially, but our investors have not been affected much because they can continue to lease the property for 21 years and the returns per Hajj season starts from Dh 30,000 onwards. Our investors and clients are happy about the return, even though the rent level in and around Makkah has come down,” said Ibrahim.

Al Hajar Tower, a 36-storey property adjacent to the Grand Mosque, is one of the several high rise towers that have appeared on the holy city’s skyline, is managed by Movenpick Murabaha Real Estate Company which has offices in Egypt, Turkey, UAE, Saudi Arabia and Kuwait.

Abraj Al Beit has a spectacular view of the Grand Mosque and direct access to its courtyards. Hajar Tower and Zam Zam Grand Tower, managed by Accor International, has studio flats of 33-38 square metres, junior suites of 50 square metres, large suites of 55 square metres and royal amiri suites of 76 square metres.

 Zam Zam Tower is one of the biggest real estate projects in the area and is one of the towers of the Abraj Al Bait project. A sukuk in the tower promises direct contact with the Grand Mosque as it is located just 100 metres from King Abdul Aziz Gate. The tower also offers a direct view of the Grand Mosque.

 

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