Islamic financial institution Abu Dhabi Islamic Bank (ADIB) has provided Hallmark Estates with a new finance facility to refinance The Stay Club North Acton in West London.
The Stay Club North Acton co-living development comprises 270-units and boasts a 100% occupancy rate. The building benefits from an EPC rating of ‘A’ and offers residential amenities including a gym, laundry facilities and concierge services.
This deal marks the second phase of the project with ADIB financing the initial phase, comprising 343 units in June 2023.
With a strong track record in offering bespoke and competitive Sharia-compliant property financing solutions for its clients in the UK, ADIB has closed senior financing transactions of over AED 3.5bn (£750m) in the last five years.
The bank’s London-based team offers financing support and advisory services for GCC clients looking for commercial and residential property investments across the UK.
“Despite challenging market conditions, we continue to offer selective Islamic structured financing solutions to our clients, facilitating both refinancing and new acquisitions. These achievements occur amidst a challenging UK Commercial Real Estate market, which has seen significant correction in capital values over the last 18 months due to a higher rate environment, impacting investment activity.
“There is a strong emphasis on the sustainability and growth prospects of rental income, to drive returns and service debt. Consequently, rigorous due diligence on asset quality, ESG credentials, and sub-sector supply and demand dynamics is paramount. We have observed strong investor demand for the ‘Living Sectors,’ particularly high-quality PBSA, Build to Rent and co-living assets, which score favourably on the above criteria fuelling robust rental income growth.”
Paul Maisfield, UK Chief Country Officer, ADIB
According to JLL, investment in the UK commercial real estate market totalled £8.1bn in Q1 2024, 4% below Q1 of 2023 and 30% below the ten-year Q1 average.
The living sectors have overtaken office for the second quarter running, with volumes reaching £2.5bn in Q1 2024, and making up for 31% of total volumes. International investors remain highly active in the UK, accounting for 50% of total transaction volumes.
