The Awqaf Properties Investment Fund (APIF) was established by the Islamic Development Bank (“IsDB” or the “Bank” herein) and commenced its operations in the year 2001 with the mandate of developing real estate Waqf (Islamic Endowment) properties (herein “Waqf Properties”) all over the world. The real estate properties can include raw land as well as existing properties requiring renewal or rehabilitation.
APIF is managed by the IsDB as a Mudarib (fund manager) and provides long-term commercial financing for the development of Waqf Properties.
APIF is a self-regulated fund, governed by the regulations of IsDB. It is not regulated by the Capital Market Authority (CMA) of Saudi Arabia or any other external governing body.
The purpose of the Fund is to provide financing to the entities owning or managing Waqf Properties in accordance with the principles of Shariah. This funding is used to develop Waqf Properties projects that will generate stable revenues and social returns, following the best practices in the endowment industry.
APIF started its operations with a capital of US$ 50 million. As of September 2018, the capital of APIF stands at US$ 78.16 million with 15 fund participants. IsDB is the main participant in APIF with an amount of US$ 29.50 million. In addition, IsDB has provided a line of financing of US$ 100 million to jointly finance Waqf Properties with APIF.
APIF provides its participants or “shareholders” an opportunity to generate financial returns from property development as well as social returns in the form of helping Waqf Property owners to develop properties whose income is used for developmental and charitable goals.
The Fund participates in the financing of Waqf Properties, with the aim of enhancing their value or returns, which ultimately serves the charitable activities of the Waqf (that owns the Waqf Properties being developed). The key sub-sectors of the targeted Waqf Properties include residential, commercial, retail and mixed-use facilities. There is also the possibility of purchasing an existing building and converting it into a Waqf property, subject to a limitation on APIF financing of a maximum of 75% of the purchase price.
APIF has approved a cumulative 55 projects (excluding cancellations) for an aggregate property or project value of US$ 1.04 billion in 30 countries with APIF financing contributions of US$ 161 million and IsDB line of US$ 370 million.
Over the years, APIF has financed projects to help generate additional income for diverse beneficiaries such as governments, Awqaf Institutions (Islamic endowments), research centers, endowment funds, charitable NGOs, orphanages and universities.