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AL Maather REIT Fund seals SAR 31m deal to purchase property

AL Maather REIT Fund seals SAR 31m deal to purchase property
The acquisition is likely to reflect positively on the fund’s financials

Riyadh – Mubasher: AL Maather REIT Fund signed an agreement to buy the real estate property of Al Nokhba Educational Schools on Wednesday, 22 January, at a value of SAR 31 million.

The acquisition will be subject to the competent regulatory procedures as well as the approvals of the current mortgagee. Moreover, the transaction will be financed through a sharia-compliant credit facility agreement, Osool & Bakheet Investment Company said in a bourse statement on Thursday.

Spanning a building area of around 10,522 square metres, the property is located in the city of Unaizah and will be built on a land area of approximately 6,694 square metres.

The property’s seller, Creative Knowledge Company for Educational Purposes, intends to rent the building at a value of SAR 2.635 million per year and for a period of 15 years binding to both parties, starting from the ownership transfer date.

Additionally, the tenant will provide rental guarantees in the form of three-year promissory notes that will be renewed annually until the end of the contract period.  

As for the material impact, the transaction is likely to reflect positively on the fund’s financials through higher net revenues. It will further expand the fund’s weighted average lease expiry (WALE).