Islamic Sharia finance has hit Queensland

Property projects and infrastructure purchases have begun in Australia with the establishment in January of the $100 million Brisbane Islamic Investment Fund (BIIF).

The funds have been channelled from Malaysia, Indonesia and the Middle East by its proponent Rusdyi Mitabu and one of the fund’s first major purchases was a galvanising factory in Toowoomba for $10m.

The fund has also earmarked $15m for a cattle feedlot and abattoir in West Java, Indonesia which will source calves from Australia and process them for the Asian and Middle Eastern markets.

Total funds under management in the top 10 Islamic fund countries for investment in sharia-compliant assets was $US 43.2 billion in 2013.

The vast majority of these were in Malaysia and Saudi Arabia.

Closer to home the fund is finalising property investments in Brisbane and on the Gold Coast, including university student accommodation.

The $100m is secured and should be fully allocated by the end of the year.

“The money is already there on an on-call basis….and will flow in once the underlying assets are ready,” Mr Mitabu told Fairfax media.

SGI-Mitabu issued the first Islamic bond, known as a sukuk in 2012.

Sharia law forbids interest, which means the investment structures of sukuk are often based on lenders temporarily owning an asset and taking a cut of the profit made with it.

Investments in gambling, alcohol, pork products and tobacco are also banned.