A type of ijara which involves the sale of a clearly specified underlying asset, which is currently being produced or constructed, for a future delivery. With forward ijara, a financier undertakes payment during the construction period, whilst customer’s payments will start within a specific period after completion. Although forward sales are impermissible under shari’a law, forward contracting through ijara is permissible provided that the rent amount will be paid only after delivery of the underlying asset.

For example, a forward ijara can entertain individuals/ firms’ needs to buy a property to be delivered in the future (such as a home, office, or plant). The rental must be known at the contract date.The rental rate must be preset for the whole tenor of ijara. However, it is possible and permissible, in consideration to volatile market conditions, to apply a floating rate that changes from period to period. In such a case, the ijara tenor can be divided into shorter intervals or phases for each of which a specific rate is applied based on the agreement of both parties at the time of affecting the ijara contract. Likewise, the parties may enter into a short-term ijara contract that is renewable at future dates, where future changes in market conditions may be accounted for.

This type of ijara is also known as ijara mawsufa fi al-dhimma.