25/09/2016 05:42 AST
Al Salam Bank-Bahrain, a pioneering Shari’a-compliant lender in the country, has signed a partnership with UAE-based private real estate investment and development company, Eagle Hills Diyar, to form a real estate development escrow account model for Marassi Al Bahrain, a distinguished urban waterfront project coming up in the kingdom.
This arrangement is set up in accordance with Law no. 28 of 2014 and the Central Bank of Bahrain’s Resolution no. 20 of 2016. Under the new legislation developers are required to establish an escrow account with a local bank for each real estate development project intended to be sold off-plan.
This will ensure protection for stakeholders, especially end-buyers, by utilizing funds only for the development they have invested in, said Anwar Murad, the deputy group CEO (Banking) at Al Salam Bank-Bahrain after signing the deal with Dr Maher Al Shaer, the managing director of Eagle Hills Diyar.
"Adding a product such as the real estate development escrow account to our portfolio of property financing models is part of our continued commitment to be one of the leading banks in exploring new and innovative Shari’a-compliant products and services tailored specifically to meet the changing needs of the market place and real estate industry," remarked Murad.
This deal makes Al Salam Bank amongst the first escrow agent banks in the kingdom, he stated.
"It is forward-thinking of the Central Bank of Bahrain and the Government to introduce the new legislation that will strengthen the market and increase investors’ confidence. We look forward to facilitating the process for other real estate developers as they seek to obtain their real estate development licence," he added.
Eagle Hills Diyar launched sales of its Marassi Residences earlier this year, Marassi Al Bahrain’s state-of-the-art development directly situated on the main 2 km beachfront promenade, a two-minute walk to world-class hotels - The Address Marassi Al Bahrain and Vida Marassi Al Bahrain - and the landmark shopping and entertainment destination, Marassi Galleria; offering convenient access to extensive retail, restaurants and café options.
On the tieup, Dr Al Shaer said: "The introduction of the ancillary regulations to the real estate development law, bringing the escrow requirements, are the first of their kind in Bahrain, and are precautionary measures for the buyer, aimed at aligning local development practices with international protocols."
"We wanted to be ahead of the curve in responding to these requirements, and have therefore been working with Al Salam Bank-Bahrain to structure an escrow account product that can subsequently be offered to other developers, raising the bar for the market," he stated.
“Marassi Al Bahrain as a project has stringent self-governance practices in place, which will lead to an increase in consumer confidence for our buyers to have complete faith both in us as a developer and in the yields of their investments for the future. We proactively sought to work with a progressive financial institution who could innovate a first-to-market product, and Al Salam Bank-Bahrain has fulfilled more than our expectation,” he added.
Piling works recently began on Marassi Al Bahrain, with the project on track for delivering a unique master-planned urban development, offering 875,000 sq m of waterfront residential, hospitality, retail and entertainment space.
Financing agreements are also in place with Kuwait Finance House (KFH) Bahrain, to provide mortgage financing for customers buying in the first phase of the project.
Buyers will be able to avail of Musharakah ownership with Ijara for up to a 20-year period. Marassi Al Bahrain currently has two waterfront properties available – Marassi Residences and Marassi Shores – which have received excellent interest from investors and end users alike.-
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