View source for Equity Reits by Mahmoud EL Gamal



== Top 20 FREQUENT WORDS ==
trust 21
debt 18
mahmoud 18
properties 18
gamal 17
july 17
gen�ve 16
mortgage 10
islamic 9
realty 9
estate 8
income 8
reit 8
muslim 7
reits 7
residential 6
separation 6
assets 5
debts 5
degrees 5
dividends 5
investors 5
leased 5
ownership 5
ratios 5
shar<U+012B>ca 5
spvs 5



== DOCUMENT KEY POINTS ==
*el g screening of stocks rice universi a case study of equity reits i am grateful to rushdi siddiqu wijetunge of dow jones for maki from sec filings available to me
*the need for adaptable shar ca mahmoud a

*a c publicly traded companies that buy develop manage maintain and rarely sell real estate properties a must pay out at least of net income as dividends a c low correlation with other asset classes offers diversif benefits a reit stocks correlation with s p a a c very few failures mostly due to excessive debt levera a islamic debt screening should reduce that risk a c consistently high dividend yield capital gain geneve july C mahmoud a
*el gamal

*a c almost all the assets of equity reits are in the form o estate held to generate rental income dividends geneve july C mahmoud a
*they give investment diversification management and tax advantages ove investment in real estate

*mden property trust rnerstone realty income trust ited dominion realty inc

*of market value a c instead the classic opinion of cabdul rahm n c ssa se appropriate and zak h on reit shares should be paid a i i oi C i i i i i i i a according to the chosen opinions geneve july C mahmoud a
*the discussion in al qarad w fiqh al zak h vol beirut al ris la pub

*a c debt asset and debt market capitalization ratios as conventionally measured tend to be high relative to commonly applied shar ca board standard a c some sector specific reits may lease properties to businesses deemed objectionable by shar ca boards retail reits investing in local strip malls that usuall grocery stores restaurants or liquor stores office bui leased to banks or insurance companies etc
*a c interest income is not an issue virtually no liquid as geneve july C mahmoud a

*a c shar ca boards have approved real estate financing vi mur baha and or a ij ra islamic mortgagor debt a c such financing can yield mortgage debt asset r a c premise a muslim may invest by sharing in the equi component of a company that financed its mortgages islamically if other debts are minor a c problem can we treat existing mortgage debts that w generated un islamically in the same manner geneve july C mahmoud a
*el gamal

*through third party entitlement a a istih a indeed this is the rule based on which sh fic s and hana the mortgagor to hold his mortgaged property maws ca a while not articulated this rule is already at the heart of t financial screening ratios since a muslim entrepreneur i allowed to borrow with interest make an interest bearin deposit etc
*leasing or giving as gift an unidentified portion of a is not allowed at inception but a lease or gift of the unid portion remains intact if un identification of the share s ensued later e

*a c the ownership structure financial obligations and legal documentation is therefore identical for the thought experim islamic reit with islamic mortgages and a conventional co a c the existing secured mortgage debt together with a lien ca viewed as mortgagee ownership of the physical property s u payments being viewed as rent c
*al baraka fatw a the sh fic legitimization of muz raca with both partie providing seeds as an a ij ra and a loan of land a mughn algeneve july C mahmoud a

*loan is irrelevant since its repayment is required to have a c a c when a muslim buys a share in the portfolio of pawned mor real estate he inherits part of the associated debt through his position in the property and not through the original forbidd persistence of the mortgage debt may be treated according t a c other unsecured interest bearing debts should be minor geneve july C mahmoud a
*a c second thought experiment if a muslim wishes to purchase mortgaged property he still needs to pay off its mortgage de release it from pawning a c in that regard the origin of the debt an islamic contract vs

*el gamal

*a c lawyers will create special purpose vehicles spvs to separate mortgage debts from the reit equity and deb positions as they currently separate islamic mortgages bank loans through spvs a c such spvs upreits downreits already develop tax reasons can pass the conventional djii screens a c let muslims invest in the unspecified sh ic portion property owned by the spvs a c pass the hefty legal costs of creating and approving thi procedure to the muslim investors geneve july C mahmoud a
*el gamal

*however most jurists disagree includi hanbal school al maws cah al fiqhiyyah based on the clear prohi a how about one who leased a bicycle to the worker who used it the wine he facilitated the worker s transportation of wine f but did not himself transport it can he take his rent how abou rented space to the bicycle rental shop a a how many degrees of separation do we need a there are no guarantees a christian drinking wine in rented pr does not endanger it and may be acting within his rights as ow leased property s usufruct
*but his business may be un islam a imam a ahmad was reported to have said that he hated the consumptio paid to a worker who carried wine or pork to a christian or jew to con that his wages should be paid

*c varying degrees of deference to avoidance of suspicions layering of degrees of separation in leasing a c insisting on infinite degrees of separation from un islamic a would make investment impossible including direct investm estate a c if it is just a matter of n degrees of separation that invites la create such separation through spvs or re package portfoli unlawful activities minor
*a c the above mentioned problems do not only apply to owners reits they apply to any co ownership of real estate where not severely restricted a c numerous leasing related fatw s for kfh al baraka and seem to center on primary business of the lessee and lessor and knowledge c

*a c it is interesting to note that jurists require cleansing of due to interest income of a corporation directly unlaw do not require cleansing of excess profits due to accept levels of debt indirectly unlawful a c applying the same principle one degree of separation juristic rule a i i i i i i i i i i i i i i i c i i i i i i i i i a a chang cause means of property ownership is equivalent to a c the property itself m
*it may seem reasonable t jurists allow ownership of any given reit stock no cl of dividends for indirect un islamic activity would be required geneve july C mahmoud a

*a c we should not treat prior opinions as universally firm precedents giving muslims a substantial and unneces disadvantage in financial markets a c if two solutions result in logically legally and financi equivalent positions and either one of those positions deemed acceptable choose the less costly one a c in particular anticipate the effects of new standards i on muslim investors and strategically minimize the weight loss of unnecessary legal fees geneve july C mahmoud a
*el gamal


 ''Please note, This is an auto generated summary based on sentances position in the document and other factors''
== DOCUMENT WORD ANALYSIS ==
=== Main Category ===
: AlHuda Material\sukuk islamic


=== KeyWords ===
reit estate invest tax trust NA account incom NA finance boardwalk manage rental busi pakistan limit leas properties NA distributable



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== DOCUMENT REFERENCES ==


=== Number of Pages ===
18


=== Published Date ===
2002-07-11 20:56:02


== Full Document ==


[http://45.40.136.134/~hodhood/HodHoodDocuments/IslamicFinance/SukukIslamic/Equity%20Reits%20by%20Mahmoud%20EL%20Gamal.pdf Read the Full Document]


[[Category:Islamic Finance]]

[[Category: Sukuk Islamic]]