Kuwait Finance to bring in capital from Middle East
Kuwait Finance House (KFH), the first foreign recipient of an Islamic banking licence, is poised to bring in capital from oil-rich Middle Eastern countries to invest in specified sectors in Malaysia.
Its subsidiary Kuwait Finance House (Malaysia) Bhd (KFHMB) executive director Salman Younis said this was in line with KFH’s as well as the government's aspirations to make Malaysia a regional Islamic banking hub.
He said KFH would make Malaysia its base for expansion into Southeast Asia.
Salman said and KFHMB’s main focus was in investment banking, with priority on the oil and gas, aviation, agriculture, real estate, IT and healthcare sectors.
KFHMB currently has a branch in Kuala Lumpur, with plans to open another one later this year. It is also planning to set up an offshore subsidiary in Labuan.
In June last year, KFH teamed up with Singapore-based Pacific Star Group to set up a US$600 million (RM2.28 billion) Islamic real estate fund.
At a press briefing in Kuala Lumpur on Feb 16, KFHMB chairman Jassar Dakheel Al-Jassar said a landmark property development project in Kuala Lumpur would be the first investment from the fund.
The landmark property development, he said, was located in Jalan Bukit Bintang and would consist of a shopping centre and two apartment blocks.
“Our move into Asia is strategic and timely as it allows us to tap into the upward cycle in real estate values in the region driven by strong economic expansion, increasing urbanisation and growth in domestic consumption,” Jassar said.
Salman said construction for both properties had begun with the completion of the shopping centre expected in June 2007 while the apartment blocks would be finished by the third quarter of 2008.
He added KFH was expecting internal rate of returns of 10% to 15% a year for the property development project.
He said KFHMB had also invested in a mixed property development with the Sunway Group and had targeted to invest in four to five more property developments by year-end.