1. www.klng.com SHARIA’A COMPLIANT PROPERTY FINANCING Jonathan Lawrence Partner Kirkpatrick & Lockhart Nicholson Graham LLP 110 Cannon Street London EC4N 6AR Direct Phone: +44(0)20 7360 8242 Email: jlawrence@klng.com

2. The Opportunity EUR 2.6 billion invested in Islamic compliant property transactions in 2004 £10 billion invested by Middle Eastern investors in European real estate since 1997 50% has been Islamic Over 25% of total cross-border investments into European property are Islamic Source: DTZ Corporate Finance

3. Principles Prohibition on charging interest Risks are shared fairly between borrowers and lender Provide assistance to society No uncertainty Prohibited investments - property use

4. Concepts Sharia’a Riba Ijara Murabaha Istisna’a

5. Classic Ijara Structure Islamic Investors Property Occupational Tenants Islamic Fund owns 100% of occupational leases invest in buys Islamic Lessee Bank Ijara lease

6. Ijara Lease Provisions Linking rental payments and interest Default interest Insurance and maintenance Sharia’a board clearance

7. Hybrid Ijara Structure: Bank which does not want to own property Non-Islamic Charity Property owns 100% of buys owns 100% of Bank Parent Company Non-Islamic Borrower/Lessor Property/Rental Income Security Share security Interest bearing loan Islamic Investors Islamic Fund Occupational Tenants owns 100% ofinvest in owns 100% of Ijara Lease rent Islamic Lessee occupational leases Security