FAQ

Popular questions

• Crestmount Fund
• Crestmount Money

• + What type of Investments has Crestmount Capital managed?

   

  Fund I – A sharia-compliant real estate fund focused on the residential sector of developed regions of APAC with a strong focus on Australia

  Fund II – A real estate accruement fund spotlighted on prominent regional MENA markets, investing in mixed-use and/or multifamily residential investment projects.

  Fund III – A private equity fund backing fintech ventures in the MENA and APAC regions aimed at providing solutions to the unbacked and underbanked citizens in populous countries.

  + What is the main objective of Crestmount Capital’s Funds?

   

  The Funds are primarily designed to preserve capital. Property funds are designed to provide mezzanine finance that fill the financing gap between developer equity and traditional bank financing. It will invest in physical properties that are either completed or build to suit, that have an MENA or APAC context, and that could provide a strong rental income streams with mid- to long-term capital growth.

  + How does Crestmount Capital differentiate itself from other regional Real Estate funds?

   

  Crestmount ascertains and narrows the investment options by identifying property types it believes will benefit from long-term sector trends. The team also rely heavily on fundamental research when evaluating potential fund holdings, including real estate market cycle study, property valuation, and management and structure assessment.

  + Why does Crestmount Capital focus on the MENA and APAC regions?

   

  Home and real estate ownership is a basic desire in every economy, including in MENA and APAC. These regions are endowed with a young, growing and increasingly well-educated population that can significantly enhance their region’s future growth trajectory. These region’s population are projected to significantly increase by 2030, and a significant proportion of that population will be of prime working-age. The potential of this large workforce to contribute to economic growth and social vitality is incredible.

  + What is a real estate cycle?

   

  A real estate cycle is defined as a series of recurring happenings that are reflected in demographic, economic and sentimental dynamics which have an effect on supply and demand in the property market. Therefore, property values may increase due to robust market growth, stabilise or may even decline through certain stages of the cycle. It is important for an investor to recognise at which phase the market is and then to secure the acquisition in the right location, at the right price.

  The pattern of a property cycle comprises four phases, following a predictable sequence between peaks, starting from the downturn stage, followed by the trough, and then on to the recovery and lastly the upswing.

  + What is the role of the Sharia Supervisory Board?

   

  The Sharia Supervisory Board analyses the fund’s investment opportunities to determine sharia-compliance, and subsequently issues approvals if the requirements are met. The Sharia Supervisory Board ensures that non-sharia compliant profits are kept separate from sharia-compliant fund profits, and also coordinates the income purification process. The Sharia Supervisory Board conducts an annual sharia audit and issues a report for the fund’s investors.

• + What is an Islamic Finance?

   

  Islamic Finance is provides a structure that’s compliant with Sharia principals that allow muslims to obtain assets while preserving their faith. These finance structures differ from conventional home loans in that they don’t involve paying interest, as that’s forbidden under Sharia principals.

  The practice of prohibiting interest stems from the Islamic tenet that money is only a medium of exchange; that it has no value in itself, therefore cannot generate more money – either through lending, or earning interest simply sitting in an account. Islamic finance is principally based on trading, therefore financiers can profit from the buying and selling of Sharia-compliant goods and services.

  + Types of Islamic Loans

   

  Ijara (Rental): this is when the financier purchases the property you want to buy and rents it to you for a fixed term, at an agreed monthly cost. When the term is over, full ownership of the property will be transferred to you. Simply, this arrangement can be viewed as a Rent to Own model.

  Musharaka (Partnership): is a co-ownership agreement, where you and the financier own a separate share of the property. Each time you make a repayment, which is part capital and part rent, you buy more of the financier’s share. Consequently, your rent reduces as your share grows and, eventually, you’ll own the whole property.

  Murabaha (Cost plus profit): this is when the financier acts as an intermediary to buy the property and then on sells the property to you for a profit. The higher price is repaid by you in equal instalments over a fixed term.

  Mudarabah (Profit Sharing): is a profit-and-loss sharing agreement where one partner (rab-ul mal) provides the capital to another partner (mudarib) is responsible for the management and investment of the capital. The profits are shared between the parties according to a pre-agreed ratio.

  Crestmount Money provided home loans utilising the “Ijara” financing agreements as it best meets the requirements of Australian Law and Sharia principals to frame the relationship between the financier and the customer.

  + Ethical Financiering

   

  Sharia financiers, are seen as an ethical financiering system and are commonplace in many countries throughout Middle East, Africa, Europe, North America, South East Asia and Australia.

  The financiering principles of Islamic financiers conduct their business according to transparency principles, ensure sustainability, and aim to put customers’ money to productive use.

  Islamic financiers represent a significant percentage of the financiering population.

  + How can I be sure that an Islamic loan is Sharia compliant?

   

  Financiers that offer Islamic loans need to be able to show that they’ve received Sharia compliance guidance from an authority in Sharia principals.

  Crestmount Money operated under an independent Sharia Supervisory Board which includes the foremost experts in the fields of Islamic economics and Islamic finance from the world’s most advanced and mature Sharia markets. The Sharia Supervisory Board, Islamic scholars who are respectively from Malaysia, the Kingdom of Saudi Arabia, Kuwait, and Qatar.

  Crestmount Money’s Tamweel Ijarah Home Finance products have been developed, reviewed and endorsed for Sharia compliance from Amanie Advisors, a leading advisory firm specialising in Islamic finance solutions covering a range of services including Sharia advisory and consultancy.

  Amanie is led by renowned global Sharia scholar, Datuk Dr. Mohd Daud Bakar, and teamed by an active and established panel of consultants covering every aspect related to the Islamic banking and finance industries.

  If your Financier can not provide proof of compliance, unfortunately there is no guarantee that the loan is compliant.

  + Can any Islamic Scholar provide Sharia compliance of finance products?

   

  Finance in general is a specialised field and Islamic financing has added complexities especially when the loan needs to also comply with Australian laws. A scholar must be an expert in Sharia, Finance and Law to have the expertise necessary to certify if a loan is compliant with Sharia principals.

  + Are Islamic mortgages more expensive?

   

  Islamic mortgage products can be more expensive than other mortgages because the Sharia-compliant financier has to cover higher administration costs.

  However, the lending policies and criteria are applied equally with any non-Sharia loans.

  + What are the risks of an Islamic mortgage?

   

  While an Islamic mortgage sounds like a great ethical alternative to a traditional home loan mortgage, there is still a level of risk involved, as there is with any loan product.

  Although the idea of an Islamic mortgage is that you are sharing an equal risk with the lender, this isn’t strictly the case. If you’re late or miss payments on your Islamic mortgage, you’ll normally be fined, until eventually your home may be repossessed. You should check the fine and repossession terms before you take out an Islamic mortgage, and understand the penalties for failing to keep up with your payments.

  + Is the Ijara agreement governed by Australian Laws?

   

  Yes

  Tamweel Ijara Home Finance is regarded as a loan under Australian law and hence we need to comply with all the Australian laws. All our agreements have successfully navigated the complexities and married the Australian Laws with Sharia principals.

  + Can I rent out the property?

   

  Yes

  You can rent out the property, as you have full responsibility of the property under the lease to use the property for any lawful and sharia compliant purpose.

  + Can I sell the property?

   

  Yes

  You can decide to sell the property at any time and the lease will be terminated and you will need to pay out the balance of the lease.

  + What features does the Ijara agreement have?

   

  The Ijara agreement is not a conventional loan and hence some feature are prohibited and not compliant with Sharia.

  Conventual loan feature	Available
  –      Interest Only	❌	We are working on how we can provide this feature in confines of Sharia principals and Australian laws.
  –      Redraw	❌	Redraw under sharia principals is prohibited as it acts like a loan.
  –      Offset Account	❌	Offset is similar to receiving interest on the money in the offset account, and hence prohibited under sharia principals.
  –      Line of Credit	❌	A Line of Credit is like a redraw facility and offset account are prohibited under sharia principals.
  –      Fixed Rentals	✔
  –      Split Rental Terms	✔
  –      Internet Access	✔

  + Are the rental payments fixed or variable?

   

  The rental term is minimum 90 days and is reset each quarter on the 1st day of January, April, July and October.

  You can also fix your rental for between 1 and 10 years. You can even have a combination of different rental terms.

  + Can I make additional payments?

   

  Yes

  You can make additional voluntary repayments, which will have the effect of reducing the term of the overall lease.

  If you decide to fix your repayments the maximum voluntary repayments are capped at $10,000 per year.

  All additional payments are permanent and cannot be “re-drawn”.

  + In who’s name will the property be registered?

   

  The property will be registered in your name as the Agent, Wakeel of the financier.

  + Who is responsible for the maintenance of the property?

   

  As the Agent, Wakeel of the financier, you are responsible for the upkeep and maintenance of the property and all associated rates and taxes.