A Study Of Community-Based Sukuk Desing And Valuation For Urban Renewal(Case Study: Hemmatabad, Isfahan)

Urban tissues’ depreciation is a reflection of the deficiencies and shortcomings, such as the lack of urban services and infrastructures, the lack of access to appropriate networks and pathways, and environmental problems. Poverty of the residents, growing population, significant increases in land and housing prices, and speculations in the housing market has made financial issues regarding urban renewal projects to be one of the main concerns of the authorities. The experience of developed countries in using real estate funds for financing the worn out tissues renewal projects was applied to the Islamic securities (sukuk) issuance. In this paper, the profitability of an urban renewal project for Hemat-Abad neighborhood is analyzed. The results confirm the project’s profitability with a profit rate of 2.1 percent and 26.83 percent rate of return. In the next step, after an economic and technical review of different types of urban project's financing plans including: Sukuk, participating bonds, hire-purchase agreements, Istisna, and Murabaha, they were ranked using multi criteria decision-making (MCDM) approach by considering the rate of return, the risk, bond issuance facilities, and public acceptance as criteria. According to the results, Sukuk was selected as the most appropriate bond type. The public acceptance for this kind of bond was analyzed and confirmed using statistical analysis on the data collected by distributing questionnaires among neighborhood residents and potential investors.