Cayman Island-based Mayfair Wealth Management (MWM) has launched a Shariah-compliant distressed property fund worth $50 million in the UAE.

Amidst the intensive reshaping of the property market in the face of the global financial crisis, ‘Real Estate Musharakah Notes’ (REMNotes),  takes advantage of the correction in real estate prices by allowing investors to participate in the acquisition of strategically sourced undervalued properties in the UAE.

The fund is expected to deliver an annual return of 12 to 15 per cent by way of steady leasing or rental income throughout the tenure of the notes, at their best prices. In addition, ‘REMNotes’ mitigates the risk of property price movements by diversifying the properties to be acquired in terms of the developers, the location of the project and type of units.

The distressed property fund is available for subscription until August 31, with a maximum tenure of 36 months at $1 per share.

‘REMNotes’ tranche shall be issued by REMNotes Inc. (BVI), who will ultimately invest in completed properties in the UAE, upon the recommendation of E-valuations Chartered Surveyors, a Dubai-based valuation firm certified by the Royal Institution of Chartered Surveyors (RICS), and Mayfair International, a global property consultancy firm from the UK.

The selection of properties will be based on a proprietary and stringent fundamental analysis with a focus on the highest economic value, reputation and financial strength of the developer, the surrounding areas, retail strength and infrastructure, to ensure that returns are truly maximised and are efficiently managed.

“Although the investment climate in the UAE has seen considerable changes in recent months as a result of the global economic crisis, we have identified a significant opportunity that stems from the slowdown in the UAE property market - one that will breathe new life to undervalued but potential-laden projects in the country,” said Amani Choudhry, CEO, Mayfair Wealth Management.

“The present market climate provides an excellent opportunity to acquire properties at benchmark prices, which lay the groundwork for the success of this Shariah-compliant growth investment.”

As an investment concept based on the Shariah principles of ‘Musharakah’, the fund’s objective is to provide investors with opportunity to invest in the UAE real estate market in a more secured manner while earning above average returns through future sales and long-term and short-term leasing of properties. In addition, MWM will be publishing semi-annual reports on the property portfolio to keep investors updated on the performance of their investments.

“Residential prices in Dubai have dropped in excess of 34 per cent on average, since their observed peaks in 2008. With an overall price decline of around 50 to 60 per cent, suggesting that prices could drop on average another 10 to 15 per cent before the market hits rock bottom, we see extensive potential for ‘REMNotes’ to succeed in the UAE,” concluded Choudhry.

MWM will also offer ‘REMNotes’, through its recently launched specialist division ‘Ameerah’, the first truly bespoke wealth management service, which is designed to cater to the specific requirements of financially independent female investors in the Middle East.-TradeArabia News Service