The Oasis financial services group has successfully listed the world’s first Shari’ah-compliant Property Unit Trust (PUT) on the AltX, a division of JSE Limited. 

Commenting on the fund’s successful debut, spokesperson for the Association of Property Unit Trusts, James Templeton, says the Property Unit Trust sector was an ideal home for the fund because of the sector’s entrenched regulatory protection. 

“Shari’ah investment and savings principles centre on strict governance,” says Templeton, “and the PUT vehicle offers an ideal structure, being regulated both by the JSE and Financial Services Board, with further compliance roles coming from the fund’s trustees.”

In addition, the fund is governed by the Oasis Group Shari’ah Advisory Board, an advisory and governance body comprising distinguished scholars from Malaysia, Bahrain and the United States.

 “As property is the primary asset class for income generation within Shari’ah, the success of the Oasis Crescent Property Fund could well portend the arrival of more niche funds within the PUT sector,” says Templeton.

The fund listed with a relatively small market capitalisation of R200-million, comprising an initial property portfolio of five Western-Cape properties worth R115-million and a further R85-million raised through the fully-subscribed private placement ahead of the listing.  

Explaining the Shari’ah nature of the fund, executive finance director of Oasis, Michael Swingler says, the major criteria relate to the tenant mix and the way in which the properties are acquired. 

“Shari’ah investment guidelines preclude us from accommodating tenants whose business activities are not acceptable,” says Swingler, “and then the properties must be acquired without the use of gearing.” 

The practicalities of this translate into a focus on quality industrial and commercial tenants, comprising 51% and 29% of the portfolio respectively, with selected retail exposure making up the balance. 

Swingler stresses that the Shari’ah nature of the fund will in no way compromise performance.  “Oasis’ two other Shari’ah-compliant equity funds have delivered superior investor returns while remaining entirely true to the Shari’ah guidelines,” he adds, “and the Oasis Group is playing a leading roll in establishing South Africa as a global hub for the management of Shari’ah compliant savings”

“The primary objective of the property fund is to provide investors with a source of sustainable income through a listed and regulated vehicle. Tenant quality and certainty of cash flows are the key drivers of capital protection and deliver sustainable income to meet the requirements of investors,” says Swingler.

Ends

For further information:

James Templeton
Association of Property Unit Trusts
(011) 775 1000

Michael Swingler
Oasis
(021) 413 7860