RHB Singapore inks hotel financing deal worth S$300 million
KUALA LUMPUR: RHB Bank Singapore recently inked the world’s largest Islamic bilateral hotel financing deal with Royal Group for a five-star hotel worth SGD300 million.
RHB Singapore head of Islamic Banking Nazmi Camalxaman said the deal, involving SO Sofitel Singapore Hotel as the underlying asset, is one of the largest Islamic hotel financing transactions globally.
“The rarity of this deal is with respect to hospitality-related assets being used for Islamic financing which was previously considered a taboo as not all income is deemed to be syariahcompliant,” it said in a statement yesterday.
SO Sofitel is a 134-room hotel located in the heart of the central business district. Built in 1927, it is one of the most popular downtown hotels, attracting both business travellers and tourists.
In April 2016, the Shariah Advisory Council and Securities Commission Malaysia resolved that the requirement that sales of alcohol must not be more than 20 per cent of the total revenue is no longer applicable, as the main purpose of hotels is to provide accommodation.
“We see hospitality assets as one of the best performing real estate classes in the republic, and we will continue to remain aggressive in this sector from a financing perspective,” he said.
Meanwhile, Royal Group of Companies co-Chairman Bobby Hiranandani said this is their first Islamic facility.
“This shows that the group is open to alternative financing as long as the economics makes sense,” he said.