IMPORTANT NOTICE NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S.

IMPORTANT NOTICE

NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S.

IMPORTANT: You must read the following disclaimer before continuing. The following disclaimer applies to the attached prospectus following this page or otherwise received as a result of such access and you are therefore advised to read this disclaimer carefully before reading, accessing or making any other use of the attached prospectus. In accessing the attached prospectus, you agree to be bound by the following terms and conditions, including any modifications to them from time to time, each time you receive any information from us as a result of such access.

Confirmation of Your Representation: By accessing this prospectus you have confirmed to BNP Paribas (the “Lead Manager”), URC Sukuk Limited and United Real Estate Company S.A.K. (“UREC”) that (i) you have understood and agree to the terms set out herein, (ii) you are not a U.S. person (within the meaning of Regulation S of the U.S. Securities Act 1933, as amended (the “Securities Act”)) or acting on behalf of any U.S. person and that the electronic mail address you have given to us is not located in the United States, its territories and possessions, and (iii) you consent to delivery by electronic transmission.

This prospectus has been made available to you in electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of transmission and consequently neither the Lead Manager nor any of its respective affiliates nor the Issuer nor UREC accepts any liability or responsibility whatsoever in respect of any difference between the prospectus distributed to you in electronic format and the hard copy version.

You are reminded that the attached prospectus has been delivered to you on the basis that you are a person into whose possession this prospectus may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not nor are you authorised to deliver this prospectus, electronically or otherwise, to any other person and in particular to any U.S. person or to any U.S. address.

Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

Restrictions: NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

Under no circumstances shall this prospectus constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these certificates in any jurisdiction in which such offer, solicitation or sale would be unlawful. Recipients of this prospectus who intend to subscribe for or purchase the certificates are reminded that any subscription or purchase may only be made on the basis of the information contained in the final prospectus.

Any certificates to be issued will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or delivered in the United States or to U.S. persons (as such terms are defined in Regulation S under the Securities Act) unless registered under the Securities Act or pursuant to an exemption from such registration.

The certificates represent interests in a collective investment scheme (as defined in the Financial Services and Markets Act 2000) which has not been authorised, recognised or otherwise approved by the UK Financial Services Authority (FSA). Accordingly, the prospectus is not being distributed to, and must not be passed on to, the general public in the UK. Rather, the communication of the prospectus as a financial promotion is only being made to those persons falling within Article 12,

Article 19(5) or Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

and within Article 8, Article 14(5) or Article 22 of the Financial Services and Markets Act 2000 (Promotion

of Collective Investment Schemes) (Exemptions) Order 2001, or to other persons to whom this prospectus

may otherwise be distributed without contravention of sections 21 or 238 of the Financial Services and

Markets Act 2000, or any person to whom it may otherwise lawfully be made. This communication is being

directed only at persons having professional experience in matters relating to investments and any investment

or investment activity to which this communication relates will be engaged in only with such persons. No

other person should rely on it.

URC SUKUK LIMITED

(Cayman Islands exempted Limited Liability Company)

U.S.$100,000,000 Trust Certificates due 2012

The issue price of the U.S.$100,000,000 Trust Certificates (Sukuk Al-Musharaka) due 2012 (the “Certificates” or the “Sukuk”) of URC Sukuk Limited (the “Issuer”) is 100 per cent. of their principal amount.

The Certificates will be constituted by a declaration of trust (the “Declaration of Trust”) dated on or about 13 June 2007 (the

“Closing Date”) made by the Issuer. Pursuant to the Declaration of Trust, the Issuer will declare that it will hold certain assets, primarily consisting of all of its rights, title and interest in, to and under the musharaka (the “Musharaka”) constituted by the musharaka agreement (the “Musharaka Agreement”) dated on or about the Closing Date and entered into between the Issuer as a partner and the United Real Estate Company S.A.K. (“UREC”) as a partner and the rights under, inter alia, the Transaction Documents and the Transaction Account (each as defined herein) and all proceeds of the foregoing, upon trust absolutely for the holders of the Certificates, pro rata according to the principal amount of Certificates held by each Certificateholder (as defined herein) in accordance with the Declaration of Trust and the terms and conditions of the Certificates (the “Conditions”). The capital of the Musharaka created pursuant to the terms of the Musharaka Agreement shall be the sum of U.S.$130,000,000. On the Closing Date, the Issuer shall contribute U.S.$100,000,000 of the capital of the Musharaka and UREC shall make a contribution in kind of a minimum of U.S.$30,000,000 constituted by UREC vesting into the Musharaka all of UREC’s rights, benefits and interests to use certain real estate and properties that have a minimum market value of U.S.$30,000,000.

On 13 September 2007 (the “First Periodic Distribution Date”) and the 13th day of each March, June, September and December commencing on the First Periodic Distribution Date (each, a “Periodic Distribution Date”), the Issuer will pay Periodic Distribution Amounts (as defined herein) to Certificateholders calculated on the basis of (i) LIBOR (as defined herein) plus 1.50 per cent. per annum, on the outstanding principal amount of the Certificates as at the beginning of the relevant Return Accumulation Period (as defined herein) on an actual/360 basis plus (ii) in respect of each Periodic Distribution Date that is an Amortisation Distribution Date (being 13 June and 13 December of each year, commencing on 13 June 2010 and through and including 13 June 2012) an amortisation payment of (a) U.S.$20,000,000, being 20 per cent. of the initial principal amount of the Certificates, plus (b) any additional costs.

The Issuer shall pay Periodic Distribution Amounts and Amortisation Distribution Amounts solely from the proceeds received in respect of the Trust Assets (as defined herein). Unless previously redeemed in the circumstances described in Condition 8 (Dissolution

at the Dissolution Distribution Amount (as defined herein).

Application has been made to the United Kingdom Financial Services Authority (“FSA”), which is the United Kingdom competent authority for the purposes of Directive 2003/71/EC (the “Prospectus Directive”) and relevant implementation measures in the United Kingdom, for this prospectus (the “Prospectus”) to be approved. Application has been made to the London Stock Exchange plc (the

“London Stock Exchange”) for the Certificates to be admitted to listing on the Official List of the London Stock Exchange and traded on the Gilt Edged and Fixed Income Market of the London Stock Exchange. This Prospectus constitutes a “prospectus” for the purposes of the Prospectus Directive and relevant implementing measures in the United Kingdom. References in this Prospectus to Certificates being “listed” (and all related references) shall mean that such Certificates have been admitted to trading on the Gilt Edged and Fixed Interest Market of the London Stock Exchange, which is a regulated market for the purposes of Directive 93/22/EEC.

Investing in the Certificates involves certain risks as more fully described in Risk Factors.

The Certificates have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities

delivered within the United States or to U.S. Persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Certificates are being offered, sold or delivered solely to non-U.S.

Persons (as defined in Regulation S of the Securities Act (“Regulation S”)) outside the United States in reliance on Regulation S.

Each purchaser of the Certificates is hereby notified that the offer and sale of Certificates to it is being made in reliance on the exemption from the registration requirements of the Securities Act provided by Regulation S.

Delivery of the Certificates in book-entry form will be made on the Closing Date. The Certificates will be issued in registered form in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. Certificates will be represented at all times by interests in a registered form global certificate without coupons attached (the “Global Certificate”), deposited on or about the Closing Date with a common depositary for Euroclear Bank S.A/N.V. as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”). Interests in the Global Certificate will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream, Luxembourg. Definitive Certificates evidencing holdings of interests in the Certificates will be issued in exchange for interests in the Global Certificate only in certain limited circumstances described herein.

Global Coordinator, Sole Bookrunner and Senior Joint Lead Manager BNP PARIBAS

Senior Joint Lead Manager NBK Capital Joint Lead Managers

Boubyan Bank K.S.C. Gulf International Bank B.S.C. Qatar Islamic Bank Co-Lead Managers

AL-Amin Bank E.C.

Co-Manager

A13.4.4 A13.4.11 A13.5.1 A13.4.8 A13.4.10 A13.4.13 A9.4.1.2 A9.4.1.1 A9.4.1.1 A9.4.1.4 A13.4.1 A13.4.5 A13.4.9

The Prospectus comprises a prospectus given in compliance with the listing rules made under Section 73A of FSMA by the UK Listing Authority for the purpose of giving information with regard to the Issuer, UREC and the Certificates. Each of UREC and the Issuer having taken all reasonable care to ensure that such is the case and confirm that the information contained in this Prospectus is, to the best of its knowledge in accordance with the facts and contains no omission likely to affects its import. Accordingly, each of UREC and the Issuer accept responsibility for the information contained in this Prospectus.

No person has been authorised to give any information or to make any representation regarding the Issuer and UREC respectively, or the Certificates other than as contained in this Prospectus or as approved for such purpose by the Issuer or UREC in connection with the offering of the Certificates. Any such representation or information should not be relied upon as having been authorised by the Issuer, UREC, or BNP Paribas (the “Lead Manager”). Neither the delivery of this Prospectus nor the offering, sale or delivery of any Certificate shall in any circumstances create any implication that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the condition (economic, political, financial or otherwise) of the Issuer or UREC since the date of this Prospectus.

The Lead Manager has not verified the information contained herein. Accordingly, no representation or warranty is made or implied by the Lead Manager or any of its affiliates and neither the Lead Manager nor any respective affiliate makes any representation or warranty or accepts any responsibility as to the accuracy or completeness of the information contained in this Prospectus or any other information provided by the Issuer or UREC in connection with the Certificates, their distribution or their future performance.

This Prospectus does not constitute an offer of, or an invitation to subscribe for or purchase, any Certificates.

It is intended only to provide information to assist potential investors in deciding whether or not to subscribe for or purchase Certificates in accordance with the terms and conditions specified by the Lead Manager. The Certificates may not be offered or sold, directly or indirectly, and this Prospectus may not be circulated, in any jurisdiction except in accordance with the legal requirements applicable to such jurisdiction.

The distribution of this Prospectus and the offering, sale and delivery of Certificates in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer, UREC and the Lead Manager to inform themselves about and to observe any such restrictions. This Prospectus may not be used for the purpose of an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such an offer or solicitation is not authorised or is unlawful. For a description of certain restrictions on offers, sales and deliveries of Certificates and on distribution of this Prospectus and other offering material relating to the Certificates—see the section entitled Subscription and Sale. Save as mentioned under Subscription and Sale, no action has been or will be taken to permit a public offering of the Certificates in any jurisdiction where any act would be required for that purpose.

Neither this Prospectus nor any other information supplied in connection with the Certificates is intended to provide the basis of any credit or other evaluation or should be considered as a recommendation by the Issuer, UREC or the Lead Manager that any recipient of this Prospectus should purchase any of the Certificates. Each investor contemplating purchasing any Certificates should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and UREC.

Notice to UK residents

The Certificates represent interests in a collective investment scheme (as defined in FSMA) which has not been authorised, recognised or otherwise approved by the U.K. Financial Services Authority (“FSA”).

Accordingly, this Prospectus is not being distributed to, or promoted to and must not be passed on to persons in the United Kingdom by any person authorised under FSMA except in accordance with an exemption.

The distribution in the United Kingdom of this Prospectus and any other marketing materials relating to the Certificates (A) if effected by a person who is not an authorised person under FSMA, is being addressed to, or directed at, only the following persons: (i) persons who are Investment Professionals as defined in Article 19(5) of the FSMA (Financial Promotion) Order 2005 (the “Financial Promotion Order”), (ii) overseas

A9.1.1 A9.1.1 A9.1.2 A9.1.2 A13.1.1 A13.1.2

recipients within the meaning of Article 12(1)(a) of the Financial Promotion Order and (iii) persons falling within any of the categories of persons described in Article 49 (High net worth companies, unincorporated associations, etc) of the Financial Promotion Order and (B) if effected by a person who is an authorised person under FSMA, is being addressed to, or directed at, only the following persons: (i) persons falling within one of the categories of Investment Professional as defined in Article 14(5) of the FSMA (Promotion of Collective Investment Schemes) (Exemptions) Order 2005 (the “Promotion of CISs Order”), (ii) overseas recipients within the meaning of Article 8(1)(a) of the Promotion of CISs Order, (iii) persons falling within any of the categories of person described in Article 22 (High net worth companies, unincorporated associations, etc.) of the Promotion of CISs Order and (iv) any other person to whom it may otherwise lawfully be made in accordance with the Promotion of CISs Order. Persons of any other description in the United Kingdom may not receive and should not act or rely on this Prospectus or any other marketing materials in relation to the Certificates.

Persons of any other description in the United Kingdom may not receive and should not act or rely on this Prospectus or any other marketing materials in relation to the Certificates.

Potential investors in the United Kingdom are advised that all, or most, of the protections afforded by the United Kingdom regulatory system will not apply to an investment in the Certificates and that compensation will not be available under the United Kingdom Financial Services Compensation Scheme.

The contents of this Prospectus as amended or supplemented from time to time have not been approved by an authorised person in accordance with the rules of the FSA.

Individuals intending to invest in any investment described in this Prospectus should consult their

professional advisers and ensure that they fully understand all risks associated with making such an

investment and have sufficient financial resources to sustain any loss that may arise from it.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless otherwise indicated, the financial information herein has been derived from the audited consolidated financial statements of UREC as of and for the year ended 31 December 2005 (the “2005 Accounts”) and the year ended 31 December 2006 (the “2006 Accounts”) (the 2005 Accounts and 2006 Accounts together, the “Financial Statements”).

The Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board as implemented in Kuwait in accordance with the Resolution of the Ministry of Commerce and Industry No. 18/1990.

References to the “Government” herein are to the government of the State of Kuwait.

Certain figures and percentages included in this Prospectus have been subject to rounding adjustments;

accordingly figures shown in the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.

All references in this Prospectus to “U.S. dollars”, “U.S.$” and “$” refer to United States dollars being the legal currency for the time being of the United States of America, all references to “KD” refer to the Kuwaiti dinar being the legal currency for the time being of Kuwait.

References to a billion are to a thousand million.

FORWARD LOOKING STATEMENTS

Some statements in this Prospectus may be deemed to be forward looking statements. Forward looking statements include statements concerning the Issuer’s and/or UREC’s plans, objectives, goals, strategies, future operations and performance and the assumptions underlying these forward looking statements. When used in this document, the words “anticipates”, “estimates”, “expects”, “believes”, “intends”, “plans”,

“aims”, “seeks”, “may”, “will”, “should” and any similar expressions generally identify forward looking statements. These forward looking statements are contained in Summary of the Offering, Risk Factors, UREC - Business Description and other sections of this Prospectus. Each of the Issuer and UREC has based these forward looking statements on the current view of the Issuer’s or, as the case may be, UREC’s management with respect to future events and financial performance. Although the Issuer or, as the case may be, UREC believes that the expectations, estimates and projections reflected in the Issuer’s or, as the case may be, UREC’s forward looking statements are reasonable as of the date of this Prospectus, if one or more of the risks or uncertainties materialise, including those which the Issuer or, as the case may be, UREC has identified in this Prospectus, or if any of the Issuer’s or, as the case may be, UREC’s underlying assumptions prove to be incomplete or inaccurate, the Issuer’s or, as the case may be, UREC’s actual results of operation may vary from those expected, estimated or predicted.

These forward looking statements speak only as at the date of this Prospectus. Without prejudice to any

requirements under applicable laws and regulations, each of UREC and the Issuer expressly disclaims any

obligation or undertaking to disseminate after the date of this Prospectus any updates or revisions to any

forward looking statements contained herein to reflect any change in expectations thereof or any change in

events, conditions or circumstances on which any such forward looking statement is based.

CONTENTS

Page

Presentation of Financial and Other Information ... iv

Forward Looking Statements ... v

Use of Proceeds ... 1

Overview of the Offering ... 2

Risk Factors ... 14

Terms and Conditions of the Certificates ... 22

The Issuer... 40

Business Description ... 41

Markets... 54

Financial Review ... 61

Trust Assets ... 67

Taxation ... 78

Global Certificate ... 79

Clearance and Settlement... 81

Subscription and Sale... 83

General Information... 86

Financial Statements ... F-1

Shari’ah Pronouncement ... A-1

USE OF PROCEEDS

The proceeds of the issue of the Certificates, being U.S.$100,000,000 will be used by the Issuer to invest

with the Musharaka partner as the Issuer’s Contribution to the Musharaka capital in accordance with the

terms of the Musharaka Agreement.

OVERVIEW OF THE OFFERING

The information in this section is a summary of the structure relating to the Sukuk offering and does not purport to be complete. The information is taken from, and is qualified in its entirety by the remainder of this Prospectus. Words and expressions defined elsewhere in this Prospectus shall have the same meanings in this summary.

Cash Flow Structure Chart The following diagram depicts a cash flow structure for the offering.

* The proceeds of the issue of Certificates shall be used in accordance with the Musharaka Business Plan.

Musharaka

URC Sukuk Limited (the “Issuer”) as partner in its capacity

as partner)

UREC as partner

URC Sukuk Limited (in its capacity as trustee in respect of

the Declaration of Trust)

UREC

Investors

Rights to use certain real estate and properties Proceeds*

Periodic Distrib ution Amount and Amortisation Distrib ution Amount Dissolution Distrib ution Amount Proceeds Certif icates

Purchase Undertaking

Cash Purchase of Units

Cash in respect

of sale of Units

under the

Purchase

Undertaking

INDICATIVE TERMS AND CONDITIONS

The principal terms and conditions for the U.S.$100,000,000 Musharaka Sukuk issue (the “Issue”) include, but will not be limited to, the following:

Parties

Issuer URC Sukuk Limited, a Cayman Islands exempted limited

liability company (the “Issuer”)

Ownership of the Issuer The authorised share capital of the Issuer is US$50,000 comprising of 50,000 shares of US$1 each and the issued share capital of the Issuer is US$1,000 comprising of 1,000 shares of US$1 each. The Issuer’s shares are owned by Walkers SPV Limited as a trustee (as to the Issuer’s shares) pursuant to a declaration of trust dated 13 June 2007 and will be held pursuant to a charitable trust under the terms of the charitable trust dated 7 May 2007. Under the terms of the charitable trust, the share trustee will, among other things, agree not to dispose of, or otherwise deal with, the Issuer’s issued shares. The share trustee will have no beneficial interest in, and derive no benefit (other than its fees) from, its holding of the shares.

Musharaka Partners United Real Estate Company S.A.K. (“UREC”) and the Issuer shall enter into a Musharaka Agreement (each a

“Musharaka Partner” and together the “Musharaka Partners”) as partners in the Musharaka (as defined below).

Management Agent UREC (in such capacity, the “Management Agent”) shall be appointed by each of the Musharaka Partners to act as agent to provide certain services to the Musharaka (as defined below) pursuant to the terms of the Management Agreement.

Obligor UREC (in such capacity the “Obligor”) shall execute the Purchase Undertaking (as defined below) in favour of the Issuer, pursuant to which UREC will undertake to, in certain circumstances, purchase all or a number of the Issuer’s Units (as defined below) in the Musharaka.

Lead Manager and Bookrunner BNP Paribas

Trustee and Sukuk Agent The Issuer will act as trustee (the “Trustee”) in respect of the Trust Assets (as defined below) for the benefit of the holders of the Certificates (the “Certificateholders”) in accordance with the Declaration of Trust and the Conditions.

Pursuant to an agency declaration dated the Closing Date made by the Issuer (the “Agency Declaration”) the Issuer will also act as agent on behalf of the Certificateholders with respect to the Trust Assets.

Citibank, N.A.

Registrar Citibank, N.A.

Principal Paying Agent, Transfer Agent, and Calculation Agent

A9.4.1.1 A9.10.1 A9.4.1.1 A9.4.1.4 A9.4.1.2

Delegate Trustee Citibank, N.A. (the “Delegate Trustee”) shall be appointed pursuant to the Declaration of Trust. The Trustee will act in accordance with the directions and instructions given to it by the Delegate Trustee in the exercise of the relevant delegated powers.

Shari’ah Board BNP Paribas Shari’ah Supervisory Board.

Auditors to the Issuer Ernst & Young (Al Aiban, Al Osami & Partners).

Summary of the Musharaka

Musharaka Agreement Pursuant to the musharaka agreement (the “Musharaka Agreement”) dated on or about the Closing Date (as defined below) and entered into between the Musharaka Partners, the Musharaka Partners agree to enter into an un-incorporated joint venture (the “Musharaka”) established pursuant to the Musharaka Agreement. The Musharaka will commence on the date of the Musharaka Agreement and will terminate and dissolve on the date falling five years and six months thereafter (the “Musharaka End Date”). The Musharaka will only terminate and dissolve prior to the Musharaka End Date in the event that all the units are vested in any single Partner.

Upon its creation, the capital of the Musharaka shall be US$130,000,000. The Issuer shall contribute US$100,000,000 (the “Issuer’s Contribution”) and UREC shall make a contribution in kind of no less than US$30,000,000 (“UREC’s Contribution”, and together with the Issuer’s Contribution, the “Capital Contributions”) to the capital of the Musharaka. UREC’s Contribution shall consist of the vesting into the Musharaka of all UREC’s rights, benefits and interests to use certain real estate and properties that have a market value of US$30,000,000.

UREC’s Contribution has been given a valuation agreed by the Musharaka Partners of US$30,000,000 based upon the valuation report dated 31 December 2006 prepared by UREC, subject to the assumptions contained therein.

Musharaka Assets The capital of the Musharaka and all of the assets of the Musharaka, including, all assets acquired after, from or through the application of the Capital Contributions, shall be assets of the Musharaka (the “Musharaka Assets”). The Musharaka Assets shall be at the disposal of the Management Agent on behalf of the Musharaka Partners. UREC’s contribution to the Musharaka Assets may in certain circumstances be substituted provided always that:

(i) at such time, no Dissolution Event has occurred and is continuing;

(ii) the substitute property is a similar asset, with a value

to be no less than the 30 per cent of the Certificates

then outstanding as shown in a valuation report carried

out not more than 3 months prior to the date of the

transfer by a firm of independent property surveyors or valuers of international repute and on substantially the same basis as the valuation carried out in respect of UREC’s initial contribution to the Musharaka Assets as of the Closing Date; and

(iii) any costs and expenses (including legal fees, notarial registration fees and taxes, if any) to effect the substitution must be paid in full by UREC.

Units Each Musharaka Partner’s entitlement to the Musharaka

Assets will be an undivided ownership interest in the Musharaka Assets (each ranking pari passu without preference) and shall constitute units (each a “Unit” and together the “Units”). As at the Closing Date, the Issuer shall hold 49 Units and UREC shall hold 51 Units.

Subject to UREC’s right to substitute its contribution to the Musharaka Assets (as described above), no Musharaka Partner may withdraw or increase its Capital Contribution except as provided under the Purchase Undertaking pursuant to which UREC undertakes to purchase the Issuer’s Units in accordance with the terms thereof.

Musharaka Business Plan The purpose of the Musharaka will be to earn profit from the application of the Capital Contributions in accordance with the Musharaka Business Plan appended to the Musharaka Agreement. The Musharaka Business Plan will allow UREC to use part of the proceeds of the issue of the Certificates for general corporate purposes.

The Lead Manager is not responsible for the performance or profitability of the Musharaka or underlying Musharaka Assets or the share and amount of the distributions made to each Musharaka Partner.

Further, the Lead Manager makes no representation and accepts no responsibility as to the feasibility of the Musharaka Business Plan or whether its objections can or will be achieved.

Musharaka Profit Distribution Profit derived from the Musharaka will be calculated by the Management Agent, and approved by the Issuer, and will be payable to the Musharaka Partners to coincide with each Periodic Distribution Date.

Each Musharaka Partner, pursuant to the Musharaka

Agreement, shall be entitled to share in the profits of the

Musharaka and bear losses of the Musharaka as outlined

below. If the Musharaka incurs a loss for any accounting

period (as shown in the Musharaka Accounts produced by

the Managing Agent in accordance with the Management

Agreement), such loss shall be borne by each Musharaka

Partner rateably in accordance with the proportion that

Partner’s Units then held by it bear to the aggregate of the

Units held by all of the Partners.

90 per cent. (ninety per cent.) of all net cash profit will be distributed to the Issuer, and 10 per cent. (ten per cent.) of all net cash profit shall be distributed to UREC (having first deducted Incentive Fees (as defined below), if any).

If the Issuer’s profit share is in excess of the Periodic Distribution Amount, and (where the Periodic Distribution Date is also an Amortisation Distribution Date), the Amortisation Amount, the surplus distributable profit shall be paid to the Management Agent as incentive fees (the

“Incentive Fees”) for acting as manager under the Management Agreement, after payment and/or settlement in full of any amounts owing under the Certificates.

Management Agreement Pursuant to a management agreement (the “Management Agreement”) dated on or about the Closing Date between the Musharaka Partners and the Management Agent, the Management Agent shall be appointed as manager of the Musharaka.

The Management Agent shall provide certain services in accordance with the terms of the Management Agreement and the Management Agent shall be authorised to carry out all necessary action on behalf of the Musharaka to achieve the Musharaka’s objectives. In consideration for acting as Management Agent, the Management Agent shall be entitled to management incentive fees to be paid out of any surplus distributable profit after payment and/or settlement in full of any amounts owing under the Certificates. The Musharaka’s operating costs, properly incurred by the Management Agent shall be for the account of the Musharaka.

Purchase Undertaking UREC will execute a purchase undertaking (the “Purchase Undertaking”) in favour of the Issuer on or about the Closing Date. Under the Purchase Undertaking, UREC irrevocably undertakes that upon the Issuer exercising its option to oblige UREC (as “Obligor”) to purchase one Unit from the Issuer, the Obligor will purchase such Unit from the Issuer at the Relevant Exercise Price on the relevant Exercise Date on an “as is where is” basis without any warranty express or implied as to condition, fitness for purpose, suitability for use or otherwise and if any warranty is implied by Law, it shall be excluded to the full extent permitted by Law. The Issuer may exercise such option upon giving notice to the Obligor under the Purchase Undertaking (each an

“Exercise Notice”) and the Issuer’s Unit shall be transferred to the Obligor on the relevant Exercise Date by way of a separate sale agreement, in each case in the form prescribed by the terms of the Purchase Undertaking.

For the purposes of the foregoing, “Relevant Exercise Price” means (taking account of clause 2 of the Musharaka Agreement):

(i) in the case of the Periodic Distribution Exercise

(being the service of an Exercise Notice no later than

five Business Days prior to the Periodic Distribution

Date (as defined below)), a U.S. dollar amount equal

to the Periodic Distribution Amount (as defined below) less the Issuer’s share of the Net Cash Profit for the relevant accounting period provided that in the event that the relevant Periodic Distribution Date which is the subject of the relevant Periodic Distribution Exercise is also an Amortisation Distribution Date (as defined below) then the Relevant Exercise Price shall be the aggregate of (a) a U.S.

dollar amount equal to the Periodic Distribution Amount less the Issuer’s share of the Net Cash Profit for the relevant Accounting Period and (b) a U.S.

dollar amount equal to the Amortisation Distribution Amount;

(ii) in the case of the Scheduled Dissolution Exercise (being the service of an Exercise Notice no later than five Business Days prior to the Scheduled Dissolution Date (as defined below)), a U.S. dollar amount equal to the Dissolution Distribution Amount (as defined below); and

(iii) in the case of the Early Dissolution Exercise (being the service of an Exercise Notice no later than five Business Days prior to the Relevant Dissolution Date), a U.S. dollar amount equal to the Dissolution Distribution Amount.

Sale Undertaking Pursuant to the terms of the Sale Undertaking, subject to the Issuer being entitled to redeem the Certificates early pursuant to Condition 8.2 (Dissolution following a Tax Event) the Obligor may, by giving not less than 30 nor more than 60 days’ notice to the Issuer (which notice shall be irrevocable) oblige the Issuer to sell the Issuer’s Units to the Obligor and the Issuer will sell its Units on an “as is” basis (without warranty express or implied as to condition, fitness for purpose, suitability for use or otherwise and if any warranty is implied by applicable law, it shall be excluded to the fullest extent permitted by applicable law) to the Obligor at the Relevant Exercise Price, provided that no such notice shall be given earlier than 90 days prior to the earliest date on which the Obligor would be obliged to pay any additional amounts following the occurrence of a Tax Event (as such term is defined in the Conditions). For the purposes of the Sale Undertaking, “Relevant Exercise Price” means a U.S.

dollar amount equal to the Dissolution Distribution Amount.

Amortisation Distribution Date Amortisation Payments (as defined below) will be made in arrear on the 13th day of each June and December or if any such day is not a Business Day, the immediately following Business Day, commencing 36 months after the Closing Date. For the avoidance of doubt, each Amortisation Distribution Date will fall on a Periodic Distribution Date.

Summary of the Certificates

Certificates US$100,000,000 trust certificates due 2012

A13.4.1 A13.4.5 A13.4.9 A13.4.13

Closing Date 13 June 2007

Issue Price 100 per cent of the aggregate principal amount of the Certificates.

Status Each Certificate represents an undivided beneficial

ownership in Trust Assets and will rank pari passu, without any preference, with the other Certificates. The Certificates are limited recourse obligations, limited to the Trust Assets held on trust for the Certificateholders pursuant to the Declaration of Trust. The Certificateholders will have no recourse to the Issuer or any of its assets once the Trust Assets held pursuant to the Declaration of Trust have been applied.

Business Day Means a day on which commercial banks in New York and Kuwait are open for general business.

Final Maturity Date 5 years from the Closing Date.

Amortisation Unless previously redeemed or cancelled, the Certificates will be amortised on the basis of 5 equal semi-annual repayments commencing on the date that falls 36 months from the Closing Date.

Periodic Distribution Dates Distributions on the Certificates will be made in arrear on the 13th day of each March, June, September and December, or if any such day is not a Business Day, the immediately following Business Day, commencing in September 2007 and up to and including June 2012.

Periodic Profit Distributions On each Periodic Distribution Date, Certificateholders will receive, from moneys received in respect of the Trust Assets, a Periodic Distribution Amount equalling the product of (i) LIBOR for such Return Accumulation Period plus the margin applied to the outstanding amount and (ii) an amount equal to US$100,000,000 less the aggregate of all Amortisation Payments previously paid by the Issuer and (iii) the number of days in such Return Accumulation Period divided by 360; plus any additional costs.

In addition, on each Amortisation Payment Date, Certificateholders will receive, from moneys received in respect of the Trust Assets, an additional amount equalling:

(a) the Amortisation Payment; plus (b) any additional costs.

For the purpose of the foregoing:

“Amortisation Payment” means US$20,000,000, being 20 per cent. of the initial principal amount of the Certificates.

Return Accumulation Period The period from, and including, the Closing Date to, but excluding, the first Periodic Distribution Date and each successive period from, and including, a Periodic Distribution Date to, but excluding, the next succeeding Periodic Distribution Date or, if earlier, a redemption date.

A13.4.10

Dissolution of the Trust Upon a sale of all the Issuer’s Units to UREC pursuant to the terms of the Purchase Undertaking, UREC will be required to deposit the Dissolution Distribution Amount (as defined below) into the Transaction Account on or before the relevant date for the redemption of the Certificates and dissolution of the Trust. Upon receipt of the Dissolution Distribution Amount from UREC in accordance with the terms of the Purchase Undertaking, the Issuer shall redeem the Certificates at the Dissolution Distribution Amount.

“Dissolution Distribution Amount” means, as of the Redemption Date, the aggregate principal amount of the Certificates then outstanding plus accrued and unpaid Periodic Distribution Amounts as of such date.

“Redemption Date” means each date specified in accordance with the Conditions for redemption of the Certificates, being any of the Scheduled Dissolution Date or a Relevant Dissolution Date.

Unless earlier dissolved as a result of the occurrence of an event described in Early Dissolution of the Trust below, the Trust will be dissolved on the Scheduled Dissolution Date and the Trustee will redeem the Certificates on such date at the Dissolution Distribution Amount.

“Relevant Dissolution Date” means the date on which the Certificates are to be redeemed as specified in the notice given by the Trustee to the Certificateholders following the occurrence of a Dissolution Event.

“Scheduled Dissolution Date” means the Periodic Distribution Date falling in June 2012.

Early Dissolution of the Trust Other than as a result of the occurrence of a Dissolution Event, Dissolution following a Tax Event (pursuant to Condition 8.2), and payments of Amortisation Payments, the Trust will not be subject to early dissolution, and the Certificates will not be redeemed in full prior to the Scheduled Dissolution Date).

Dissolution Events The “Dissolution Events” are set out in Condition 11.

If any Dissolution Event shall occur, the Delegate Trustee

will give notice of the occurrence of such Dissolution Event

to the Certificateholders with a request to such holders to

indicate if they wish the Trust to be dissolved. If so requested

in writing by the holders of at least 25 per cent. in aggregate

of the principal amount of the Certificates then outstanding,

or if so directed by an extraordinary resolution of the

Certificateholders, the Delegate Trustee shall (subject in each

case to being indemnified or secured to its satisfaction) or, if

the Delegate Trustee so decides in its discretion, the Delegate

Trustee may give notice to all the Certificateholders that the

Trust is to be dissolved and the Certificates are to be

redeemed at the Dissolution Distribution Amount.

Role of Delegate Trustee Pursuant to the Declaration of Trust, the Trustee shall delegate certain of its rights and powers, authorities, duties and discretions to the Delegate Trustee, which shall take effect immediately, without further action, upon the occurrence of a Potential Dissolution Event or a Dissolution Event. In particular, the Delegate Trustee shall be entitled to:

(a) deliver Exercise Notices to the Obligor in accordance with the Purchase Undertaking; and

(b) following a Dissolution Event, take any enforcement action in the name of the Issuer against either the Musharaka partners.

Form and Delivery of the Certificates The Certificates will be issued in registered global form only, and will be represented by interest in a Global Certificate deposited with a common depositary for Euroclear and Clearstream, Luxembourg. Definitive Certificates evidencing holdings of Certificates will only be issued in exchange for interest in the Global Certificate in certain limited circumstances.

Clearance and Settlement Certificateholders may elect to hold their interest in the Global Certificate in book-entry form through each of Euroclear or Clearstream, Luxembourg. Transfers within Clearstream, Luxembourg or Euroclear will be in accordance with the usual rules and operating procedures of the relevant clearance system.

Denominations The Certificates will be issued in minimum denominations of US$100,000 and integral multiples of US$1,000 in excess thereof.

The Trust Assets The “Trust” is the trust declared by the Issuer under the Declaration of Trust. The “Trust Assets” consist of all of the Issuer’s rights, interest and benefit, present and future, in, to and under the Musharaka, and each of the Transaction Documents, all moneys standing to the credit of the Transaction Account, and all proceeds of the foregoing.

Transaction Account The Principal Paying Agent will maintain and operate a transaction account (the “Transaction Account”) on behalf of the Trust. Distributions of moneys deriving from the Trust Assets will be made to Certificateholders from funds standing to the credit of the Transaction Account.

Costs Undertaking Pursuant to a costs undertaking (the “Costs Undertaking”) given by UREC, UREC will pay certain fees and expenses of, and indemnify against certain losses of, among others, the Trustee, the Delegate Trustee, the Paying Agents, the Transfer Agent and the Calculation Agent.

Limited Recourse Each Certificate represents an undivided beneficial ownership interest in the Trust Assets. Certificateholders will have no recourse to any assets of the Issuer other than the Trust Assets. Any creditor of the Issuer, its officers, directors, shareholders or administrator will have no recourse to the

A13.4.4 A13.4.11 A13.4.11

Trust Assets. Proceeds of the Trust Assets are the sole source of payments on the Certificates. The Certificates do not represent an interest in or obligation of any of the Issuer, the Management Agent or the Obligor (to the extent each fulfils all of its obligations under the relevant Transaction Documents to which it is a party), the Lead Manager and Bookrunner or the Agents or any affiliate of any of the foregoing entities. Accordingly, Certificateholders will have no recourse to any assets of the Issuer (other than the Trust Assets), the Management Agent or the Obligor (to the extent each fulfils all of its obligations under the Transaction Documents to which it is a party), the Lead Manager, Bookrunner, the Agents, the Delegate Trustee or the Trustee or any affiliate of any of the foregoing entities in respect of any shortfall in the expected amounts from the Trust Assets.

However, each of the Management Agent and the Obligor is obliged to make the payments under the Transaction Documents to which it is a party directly to the Issuer, and the Issuer, as trustee and/or agent for the benefit of the Certificateholders and any other trustee appointed to replace the Trustee pursuant to the Declaration of Trust, will have direct recourse against the Management Agent or the Obligor as the case may be to recover payments due to the Issuer from the Management Agent or the Obligor, as the case may be, pursuant to the Transaction Documents to which the Management Agent or the Obligor is a party.

Enforcement Following the distribution of the Trust Assets to the Certificateholders to the extent permitted under the Conditions and the Declaration of Trust, the Trustee shall have no further liability to the Certificateholders, and accordingly such Certificateholders may not take any action against the Trustee or any other person to recover any such sum or asset in respect of the Certificates or the Trust Assets.

The Trustee shall not in any circumstances be obliged to take any action to enforce or to realise such Trust Assets or take any action against either the Management Agent or the Obligor under the Transaction Documents unless directed to do so by the Certificateholders in accordance with the Conditions following the occurrence of a Dissolution Event, and then only to the extent indemnified and/or secured to its satisfaction.

No Certificateholder shall be entitled to proceed directly against either the Management Agent or the Obligor.

The foregoing is subject to the following. After distributing

the net proceeds, the obligations of the Trustee in respect of

such Certificates shall be satisfied and no holder of such

Certificates may take further steps against the Trustee to

recover any further sums in respect of such Certificates and

the right to receive any such sums unpaid shall be

extinguished. In particular, no holder of Certificates will be

able to petition for, or join any other person in instituting

proceeds for, the reorganisation, liquidation, winding up or

receivership of the Issuer or the Trustee, the Trust or the Obligor, or any of their affiliates as a consequence of such shortfall or otherwise.

Withholding Tax All payments in respect of the Purchase Undertaking or to be made by the Management Agent to the Issuer under the Management Agreement shall be made without withholding or deduction for, Taxes, unless the withholding or deduction of such Taxes is required by law. In such event, the Obligor, pursuant to the Purchase Undertaking, and the Management Agent, pursuant to the Management Agreement, will be required to pay to the Issuer additional amounts so that the Issuer will receive the full amount which would otherwise be due and payable. Further, if the Issuer is required to make any payment of or on account of Taxes to any taxing authority on or in relation to any sum paid or payable or received or receivable thereunder by the Issuer (including, without limitation, any sum received or receivable under this clause) or any liability in respect of any such payment is imposed, levied or assessed against the Issuer by any taxing authority, Obligor shall, within 10 business days upon demand of the Issuer indemnify against such payment or liability, together with any penalties and expenses payable or incurred in connection therewith.

All payments in respect of the Certificates shall be made without withholding or deduction for, or on account of, Taxes unless the withholding or deduction of such Taxes is required by law. In such event, the Obligor will be required pursuant to the terms of the Purchase Undertaking to pay to the Issuer additional amounts as may be necessary, so that the full amount which otherwise would have been due and payable under the Certificates is received by parties entitled thereto.

Use of Proceeds The proceeds of the issue of the Certificates will be used by the Issuer to pay the Issuer’s Contribution to the Musharaka in accordance with the Musharaka Business Plan which will allow UREC to use the issue of the Certificates for general corporate purposes.

Tax Considerations See “Taxation” for a description of certain tax considerations applicable to the Certificates.

Listing Application will be made to the UK Listing Authority to list the Certificates on the Official List of the FSA and to trading on the gilt edged and fixed income market of the London Stock Exchange, but there can be no confirmation that such listing will occur on or prior to the Closing Date, or at all.

Rating On issue, the Certificates are expected to be assigned a BBB+ rating by Capital Intelligence. A rating is not a recommendation to buy, sell or hold securities or shares and may be subject to suspension, change or withdrawal at any time by the assigning rating agency.

Transfer Restrictions Certain purchase and transfer restrictions are applicable to the Certificates, see Subscription and Sale.

A13.7.4 A13.7.5 A13.5.1

Transaction Documents The “Transaction Documents” are the Musharaka Agreement, the Management Agreement, the Purchase Undertaking, the Sale Undertaking, the Agency Declaration, the Agency Agreement, the Declaration of Trust, the Costs Undertaking, the Subscription Agreement, the Certificates and any other agreements and documents delivered or executed in connection therewith.

All of the Transaction Documents (except as otherwise noted herein) and the Certificates will be governed by English law, subject to arbitration in London, England under the Rules of Arbitration of the International Chamber of Commerce in London England and to the jurisdiction of the English Courts.

Waiver of Sovereign Immunity The Obligor acknowledges that the transactions contemplated by the Transaction Documents are commercial transactions. To the extent that the Obligor may claim for itself or its assets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that such immunity (whether or not claimed) may be attributed to the Obligor or its assets or revenues, the Obligor agrees not to claim and irrevocably and unconditionally waives such immunity in relation to any proceedings.

Governing Law and Jurisdiction/

Arbitration

A13.4.3

RISK FACTORS

Prior to investing in any Certificates, potential investors should carefully consider, together with all other information contained in this Prospectus, the risk factors described below. The risk factors described below are not exhaustive; additional risks and uncertainties not presently known or that are currently deemed immaterial may also affect the Issuer. The price of the Certificates could decline due to any of these risks, and investors could lose all or part of their investment.

Risks related to UREC

UREC’s business is dependent on economic and trade growth

UREC’s core business is property development and management within the Kuwaiti market. As a result, there is a direct correlation between the growth of Kuwait’s economy and the volume of business developed by UREC. Any deterioration in Kuwait’s economic conditions could adversely affect UREC’s financial results and future growth and there is no guarantee that the growth of Kuwait and UREC shown in the past can or will be sustained in the future.

The economic strength and financial condition of Kuwait and other countries in the Arabian Gulf Region is highly affected by the price of oil. Any significant drop in oil prices could adversely impact the financial condition of Kuwait. Economic downturns can also impact investment activity as disposable income is affected. A severe or prolonged downturn in economic activity in the region or globally could adversely affect UREC’s business, financial position and financial performance.

UREC is subject to project development and approval risks

There are a number of construction, financing, operating and other risks associated with project developments in the jurisdictions in which UREC operates. Projects of the types undertaken by UREC typically require substantial capital expenditure during the construction phase and usually take many months, sometimes years, before they become operational and generate revenue. The time taken and the costs involved in completing construction can be adversely affected by many factors including shortages of materials, equipment and labour, adverse weather conditions, natural disasters, labour disputes, disputes with sub-contractors, accidents, changes in governmental priorities and other unforeseen circumstances. Any of these could give rise to delays in the completion of construction and/or to cost overruns and any of these risks combined or separately could have a material adverse effect on UREC’s results. In relation to some of UREC’s projects, certain government approvals, permits, licences or consents may need to be obtained.

Delays in the process of obtaining, or a failure to obtain, the requisite licences, permits or approvals from government agencies or authorities can also increase the cost or delay or prevent the commercial operation of a business, which could adversely affect the financial performance of UREC’s business. Construction delays can result in the loss of revenues. The failure to complete construction according to its specifications may result in liabilities, reduced efficiency and lower financial returns. Although the majority of UREC’s infrastructure projects have been completed on schedule, there can be no assurance that this will remain the case or that future infrastructure projects will be completed on time, or at all, and generate satisfactory returns. Finally, the acquisition or transfer of interests in such projects may be subject to governmental approvals, which can impact UREC’s ability to dispose of such projects.

UREC has significant construction and capital expenditure requirements

Many of UREC’s developments are under construction or in the initial stages of development and have significant capital expenditure requirements. Additionally, there are certain investment properties that UREC currently owns and leases to third parties. UREC’s investment properties will need renovations and other capital improvements, including replacements, from time to time, of property, plant and equipment. Some of these capital improvements are required by health, safety or other regulations. Construction of new investment properties, which UREC intends to own and operate and capital improvements of operating investment properties, which UREC may own and operate, may give rise to the following risks:

A9.3.1 A13.2

• possible structural and environmental problems;

• construction cost over-runs and delays;

• disruption in service and access to third parties causing reduced demand, occupancy and rents;

• possible shortage of available cash to fund construction and capital improvements and the related possibility that financing for these capital improvements may not be available to UREC on affordable terms; and

• uncertainties as to market demand or a loss of market demand after construction capital improvements have begun.

The cost of construction and capital improvements could have a material adverse effect on UREC’s business, financial condition and results of operations.

UREC may be unable to complete its projects that are under construction or in initial stages of development

As of the date of this Prospectus, UREC had approximately 9 projects under construction or in initial stages of development. UREC intends to continue to develop new properties in the markets in which it currently operates and in new markets. UREC’s current and future development and construction activities involve a number of risks, including the following significant risks:

• inability to obtain desirable property locations at moderate prices;

• inability to obtain construction financing on favourable terms;

• requirement to make significant current capital expenditures for certain properties without receiving revenue from these properties until future periods;

• inability to complete development projects on schedule or within budgeted amounts;

• delays or refusals in obtaining all necessary planning, land use, building, occupancy and other required governmental permits and authorisations; and

• fluctuations in occupancy rates at newly developed properties due to a number of factors, including market and economic conditions, that may result in UREC’s investment not being profitable.

There can be no assurance that UREC’s current or future construction projects will be completed and UREC’s inability to complete a project could have a material adverse effect on its business, financial condition and results of operations.

The bankruptcy or insolvency of one or more of UREC’s contractors or suppliers may adversely affect the construction of certain construction projects and impact UREC’s ability to fulfil its obligations under its contracts with its customers.

There has been a significant rise in the amount of property development in the Middle East and North Africa

(“MENA”) region and the Indian sub-continent. As a result, the number of contractors and suppliers

available to meet demand is limited. Therefore, if one of UREC’s contractors or suppliers declares

bankruptcy or is declared to be insolvent while a project is being developed, there is a strong likelihood that

UREC will not be able to find a replacement contractor or supplier promptly. Further, even assuming that

UREC were able to find a replacement contractor or a supplier in a timely fashion, that contractor or supplier

may need time to familiarise itself with the ongoing project or produce the required product, thus causing a

delay in the completion of the project. In addition, there is no guarantee that the replacement contractor or

supplier that is retained will be one that UREC has employed before and thus may not meet UREC’s high

standards for both quality workmanship and finishes, respectively. If any of these events were to occur, it

could have a material adverse affect on UREC’s business, financial condition or results of operations.

The illiquidity of real estate investments and the lack of alternative uses of commercial and/or residential properties could significantly limit UREC’s ability to respond to adverse changes in the performance of its properties and harm its financial condition.

Because real estate investments, in general, and real estate investments in Kuwait, in particular, are relatively illiquid, UREC’s ability to promptly sell one or more of its properties in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond UREC’s control. The management of UREC cannot predict whether UREC will be able to sell any property for the price or on the terms set by it, or whether any price or other terms offered by a prospective purchaser would be acceptable to it. The management of UREC also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

In addition, certain commercial and/or residential properties may not be readily converted to alternative uses if they were to become unprofitable due to competition, age of improvements, decreased demand or other factors. The conversion of such commercial and/or residential property to alternative uses would generally require substantial capital expenditures. In particular, UREC may be required to expend funds to correct defects or to make improvements before a property can be sold. There can be no assurance that UREC will have funds available to correct defects or to make improvements. These factors and any others that would impede UREC’s ability to respond to adverse changes in the performance of its properties could have a material adverse effect on its business, financial condition and results of operations.

Property valuation is inherently subjective and uncertain

Like every valuation of property and property-related assets, the valuation of UREC’s development properties is inherently subjective. This is because property valuations are made on the basis of assumptions which may not prove to reflect the true position. As a result, valuations are subject to uncertainty. There is no assurance that the valuations of the properties will reflect actual sale prices even where any such sales occur shortly after the relevant valuation date and therefore could have a material adverse effect on UREC’s business, financial condition and results of operations.

UREC’s properties could be exposed to events over which UREC has no control

UREC’s properties may be exposed to effects of natural disasters and other potentially catastrophic events.

Although constructed, operated and maintained to withstand certain of these occurrences, UREC’s properties may not be adequately protected in all circumstances. There can be no assurances that any such occurrences will not adversely affect UREC’s existing developments and thereby have a material adverse effect on its business, financial condition, operating results and future prospects and affect the liquidation value of the relevant properties.

Terrorism, and threats of terrorism, epidemics and other natural calamities could contribute to a reduction of foreign investment. Wars, and threats of war, and other political uncertainties could also reduce demand for UREC’s properties and services.

Insurance

UREC has obtained insurance covering fire, buildings, workmen compensation and cash insurance for UREC staff (the “Insurance Policies”). UREC does not provide cover for the property or staff of tenants.

The insured risks comprise, principally, typical property insurance risks for properties of the type owned by UREC. The Insurance Policies are due to expire on varying dates depending on the policy with tacit renewal for a certain period thereafter. No assurances can be given that the Insurance Policies will be renewed on the same terms or will be renewed at all. The amount of cover provided under the Insurance Policies varies and deductibles apply.

UREC will covenant in the Transaction Documents that it will keep all Musharaka Assets insured in the

aggregate to full replacement costs, excluding the relevant deductible items, and provide insurance in respect

of its assets with reputable insurers against loss of damage by, inter alia, fire and explosion and maintain such other insurances in line with market practice.

No assurances can be given that the proceeds of any such insurance will be sufficient to pay, in full, all the amounts due from UREC under the Transaction Documents and, hence the Sukuk Certificates. Certain types of risks and losses (for example, losses resulting from terrorism) are not economically insurable or are not covered by the required insurance policies. If an uninsured or uninsurable loss were to occur, UREC might not have sufficient funds to repay in full all amounts owing by it under the Transaction Documents.

Competition

UREC increasingly faces competition from global and local real estate development companies. There is no assurance that UREC’s business will not be affected by existing and future competitors in Kuwait or elsewhere. Such competitors may, for example, charge lower prices for their properties or otherwise see demand for their properties increase disproportionately to the demand for properties developed by UREC. If this were to materialise, it could have a material adverse effect on the revenue that UREC could generate from its business.

Reliance on key personnel

UREC’s operations depend, to a significant extent upon, among other factors, the continued service of senior executives and other professional or technical staff. If any existing key personnel leaves employment and UREC fails to appoint a replacement promptly, or if UREC either fails to maintain a sufficient number of appropriate or technical staff or fails to recruit appropriate professional and technical staff in pace with its growth, its performance may be adversely affected.

Taxes

UREC has committed to the Issuer to gross up any tax liabilities in Kuwait relating to the transaction. While this commitment would be contractually valid between the parties under Kuwaiti law, the same would not be binding upon the Kuwaiti tax authorities. However, in the event that UREC did not honour its commitment to gross-up tax claims and the Kuwait tax authorities did bring an action against the Issuer, then the Issuer would have a valid cause of action against UREC to be indemnified for the tax claim.

Environment Risks

If an environmental liability arises in relation to any project owned, operated or leased by UREC and it is not remedied, or it is not capable of being remedied, this may adversely affect such project and the business of UREC (either because of the cost implications for UREC or because of disruption to services provided at the relevant project or property). It may also result in a reduction of the value of the relevant project or property or affect the ability of UREC to dispose of such project or property.

Regulatory/Legal

UREC is subject to varying degrees of local, regional and national regulation, covering environmental, safety and maintenance standards, and other factors that affect the property market. Specifically, UREC, which is a publicly-listed company in Kuwait, is regulated by the Kuwait Stock Exchange and as such is required to adhere to its rules and regulations. There can be no assurance that such laws or regulations or the interpretation or enforcement of or change in any such laws or regulations will not have an adverse effect on the value of the projects or require UREC to incur additional costs or otherwise adversely affect the management of its projects, which could adversely affect the results of operations and financial condition of UREC.

General

Real property investments are subject to varying degrees of risk. Rental revenues, property values and the

demands of tenants are affected by changes in the general economic climate and local conditions such as an