VCBank offers three innovative Shari’ah-compliant short-term liquidity programmes with trust certificates and shares backed by income-yielding real estate assets in Bahrain and Dubai. The offering of each programme is for a maximum period of one year. The profit rate ranges between six per cent for investments held for twelve months and four per cent for one month, with profits being distributed on a quarterly basis.

Programme 1, which was launched in 2010, is backed by the Venture Capital Bank Building located in the Diplomatic Area of Manama, Bahrain. This comprises a unique combination of office space, retail outlets, and private and public car parking. Programme 2, introduced in 2015, is backed by first building of the Jebel Ali Labour Accommodation Complex in Dubai; while the Programme 3, launched in 2016, is backed by the second and third buildings of the complex.

The value of the underlying asset of Programme 1 – Venture Capital Bank Building – has been affected by lower occupancy rates resulting from changing real estate market dynamics in Bahrain. Key factors include reduced demand for conventional office space (and associated car parking) due to the growing trend towards serviced offices; and a change in companies’ operating models with a greater focus on remote working by staff, caused by COVID-19. The value of the underlying asset of Programmes 2 & 3 – Jebel Ali Labour Accommodation Complex – has been affected by the large reduction in the number of labourers due to the slowdown in construction activity in the UAE, with a resulting oversupply of approved labour accommodation. In addition, the age of the three buildings makes the complex less competitive compared to newer properties in the market.

A number of clearly-defined remedial steps are being taken to address these issues. These will facilitate implementation of a major restructuring exercise aimed at enhancing the attractiveness and sustainability of these programmes.