July 8, 2014
Real estate law firm Davitt Jones Bould (DJB) has advised the Treasury on the property aspects of the UK Government’s first issue of a sovereign Sukuk. DJB was instructed by the Treasury to work as part of its legal team, charged with creating the UK’s first sovereign Sukuk.
The project, completed on the 25th June, cemented Britain’s position as the Western hub for Islamic finance by becoming the first country outside the Islamic world to issue sovereign Sukuk, the Islamic equivalent of a bond.
The government confirmed that £200 million of Sukuk, maturing on the 22nd July 2019, had been sold to investors based in the UK and in the major hubs for Islamic finance around the world. This first sovereign Sukuk for the UK received very strong demand with orders totalling around £2.3 billion.
The Chancellor of the Exchequer George Osborne said: “[The} issuance of Britain’s first sovereign Sukuk delivers on the government’s commitment to become the western hub of Islamic finance and is part of our long term economic plan to make Britain the undisputed centre of the global financial system.
“We have seen very strong demand for the Sukuk, resulting in a price that delivers good value for money for the taxpayer. I hope that the success of this government issuance will encourage further private sector issuances of Sukuk in the UK.”
DJB advised in relation to the three central government properties that underpinned the Sukuk. Britain’s sovereign Sukuk uses the Al-Ijara structure, the most common structure for sovereign Sukuk, with rental payments on property providing the income for investors.
DJB as one of the governments approved specialist real estate legal advisors was pleased to be instructed on this strategically important project. Madeleine Davitt, DJB’s Managing Director, comments: “We are known for our focus on property and advising on key projects where delivery is critical. For this reason we continue to build the DJB team based on exemplary experience and talent.”