Dubai-based Islamic mortgage lender Tamweel said on Tuesday it is on track to open an Egyptian unit by July and could borrow funds in Egyptian pounds to finance expansion in the most populous Arab nation.
Tamweel, the largest UAE mortgage financer by market value, is also considering entering Turkey and other countries, such as Morocco and Tunisia, where local property developers are expanding, its Chairman Sheikh Khaled bin Zayed Al Nahyan said. Tamweel said in February it was looking these countries for expansion.
The mortgage company said earlier this month its shareholders had approved plans to sell Dh5.1 billion ($1.39 billion) of Islamic bonds to finance expansion in the UAE and overseas. Sheikh Khaled was not more specific about Tamweel's Egyptian pound borrowing plans next year.
"We will take into consideration foreign exchange exposure" in 2009, Sheikh Khaled said of the firm's plans to finance the start of its Egyptian unit. Until then, Tamweel would use existing capital, he said.
Sheikh Khaled said Tamweel "would look where local developers are going" to dictate future expansion plans.
Dubai developers including Emaar Properties, the largest publicly traded Arab developer, have launched billions of dollars worth of real estate projects throughout the region, including in Egypt, Turkey, Morocco and Tunisia.
"For Morocco and Tunisia, we need changes in the legal infrastructure before we can go there," Sheikh Khaled said.
Islamic mortgages comply with Islamic law banning interest because the religion equates it with usury.
Unlike conventional mortgage providers, which lend to the home buyers, Islamic companies generally buy the property and then rent it back to the home owner in instalments that include their profit. (Reuters)
Tamweel could borrow to finance Egypt unit