Ijara: Leasing Structures

The Islamic equivalent of lease-to-own financing.

In an Ijara Muntahia Bittamleek structure, the financier purchases the real estate and leases it to the investor. The lease payments include a portion for the use of the asset and a portion that goes toward equity buildup.

Advantages for Real Estate

Ijara is highly suitable for commercial real estate as it clearly separates the ownership risk (borne by the financier during the lease) from the operational risk, while ensuring absolute compliance with AAOIFI standards.