The famous Admiralty House and four other well-known Whitehall buildings are now operating in accordance with aspects of Shariah rules after they were purchased as part of an Islamic bond scheme.
The properties must comply with aspects of Sharia laws under the terms of special bonds known as “sukuk”, announced by George Osborne two years ago when Britain became the first Western country to issue them.
At least £200m of the sukuk bonds have been sold to investors in the UK and the major Islamic finance centres in the Middle East and Asia.
Under Shariah law, charging interest is forbidden. So to allow Islamic investors to receive a return on their money, the sukuk bonds pay them rental income on certain buildings instead.
As part of the deal, the Government agreed that the nominally rented buildings would abide by certain aspects of Shariah rules, so Muslim investors did not feel they were making money out of something they regard as immoral, such as a pub.
In 2014, the Government cited a number of organisations, including the Executive Shariah Committee of HSBC Saudi Arabia, as saying the bonds were “Shariah compliant” but suggested potential investors should seek opinions from their chosen experts.
It was unclear which other aspects of Shariah are being adhered to by the managers of the buildings concerned, but a government source said it had been agreed that serving pork in Richmond House would not affect the Shariah compliance of the sukuk. “Alcohol being served hasn’t arisen, as you would expect for a government building,” the insider added.
In January, The Times reported that a plan to relocate MPs to Richmond House to allow refurbishment work at Westminster was meeting resistance because Richmond House was dry under the terms of the sukuk agreement.
The sukuk bonds proved hugely popular – the £200m scheme was over-subscribed 10-fold. In 2014, Chancellor George Osborne expressed the hope that it would boost London’s standing as a global financial centre.
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