ADIB reports strong growth in H1, driven by UK real estate financing.

Abu Dhabi Islamic Bank (ADIB) has reported continued growth in its UK commercial real estate financing portfolio, adding over £100 million ($127.3 million) in new financing assets during the first half of this year.

The bank's recent transactions include structured financing for several key projects, such as a 343-unit co-living development in North Acton, West London, a 400-key hotel at Gatwick Airport, a 133,000 square foot Grade A multi-let office campus in Guildford, and a 153,000 square foot national headquarters office campus in Newport, Wales.

ADIB highlighted its ability to offer tailored Islamic structured financing solutions, supporting both refinancing and new acquisitions for its clients.

These accomplishments come despite a challenging UK commercial real estate market, which has seen a sharp correction in capital values over the past 12 months, primarily due to the higher interest rate environment affecting investment activity, according to the Abu Dhabi-based lender.

The bank noted a strong focus on the sustainability and growth potential of rental income, which drives returns and services debt obligations.

Investor demand remains high for the 'Living Sectors,' particularly for high-quality purpose-built student accommodation (PBSA) and build-to-rent (BTR) assets, which have fueled substantial rental income growth.

With a proven track record in providing bespoke Sharia-compliant property financing solutions in the UK, ADIB has closed senior financing transactions exceeding AED3 billion ($816 million) over the past five years.

ADIB’s London-based team continues to provide financing and advisory services to GCC clients seeking commercial and residential property investments across the UK.

Despite a decline in average capital values by 12.6% in 2022, according to Capital Economics, UK commercial real estate financing remains active. In April 2023, net financing for UK commercial real estate (including developments) reached £1.2 billion, marking a 137% month-on-month increase and the highest level since December 2021, as reported by the Bank of England.