The role of sukuk in developing real estate projects

Aishath Muneeza, Sherin Kunhibava, M. Kabir Hassan and Paolo Biancone

Chapter 10 in Islamic Finance in Eurasia, 2024, pp 211-220 from Edward Elgar Publishing

Abstract: Sukuk is an innovative Islamic finance product used in the capital markets which is often described as the financial product which is equivalent to a conventional bond. However, sukuk is a much more complex product than a conventional bond from the perspective of structuring it for all types of projects, irrespective of the modus operandi of the project, in structuring conventional bonds, the structure used will be uniform whereas for sukuk it is not. The objective of this paper is to explore the role of sukuk in developing real estate projects by presenting some case studies. The paper uses a qualitative research approach where the case studies originate from the public domain to show the role of sukuk in developing real estate projects. The findings of this research suggest that sukuk is an instrument which has been successfully used in various parts of the world in financing real estate projects and there are various Shariah compliant contracts used in these projects showing that even in the future, the same contracts can be utilized for the same purpose. It is also found that there is scope to utilize technology in these sukuk structures in the future to enhance them and the digitalization of sukuk will further enhance its role in financing real estate projects. It is anticipated that the findings of this research will assist stakeholders to comprehend the existing role of sukuk and its potential in the future in financing real estate projects.

Keywords: Asian Studies; Business and Management; Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2024
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