Addendum announcement from Osool & Bakheet Investment Company regarding the signing of Al Maather REIT fund agreement on the purchase of an educational facility land in the city of Riyadh, Al Salam district
Thursday, October 01, 2020 at 9:30 AM
Further to the announcement of Osool & Bakheet Investment Company published on 07/02/1442H corresponding to 24/09/2020, concerning the signing of the purchase agreement of a real estate in city of Riyadh, Al Salam district. Osool & Bakheet Investment Co. announces the successful completion of purchase transaction on Wednesday 13/02/1442 H corresponding to 30/09/2020 with a value of SAR17,000,000 (Seventeen million Saudi riyals before tax. The property has been leased out to Integrated Development For a period of eleven years, for a period of 11 years The first lease year starts within 15 days from the date of purchase with an annual rental value of 3,600,000 (three million six hundred thousand Saudi riyals).
It should be noted that the tenant has built structure on the land, with a value of approximately 5,937,000 (five million nine hundred thirty-seven thousand riyals) The ownership of which was transferred to the fund, and the fund is committed itself under the lease contract to complete the construction of the educational complex with an estimated total costs that will amount to 23 million riyal (5.9 million riyals for current construction + 17.1 million for the rest of the construction costs), the fund paid the tenet an amount of 1.79 million riyals as part of the current construction value and the remaining amount of the current construction value of 4.14 million riyals provided by the tenant against the value of the first year rent plus VAT, noting that the rental value is fixed during the first five years, which represents a value of 3.6 million riyals from the contract, which rises from the sixth year by 17.5%.
The tenet provided rental guarantees in the form of ten years promissory notes.
The property is located in the city of Riyadh, in Al Salam district, near the intersection of Abdulrahman Ibn Awf Rd. and Alshabab St., and the building area is approximately 18,634.1 square meters built on a land area of approximately 10,000 square meters.
The Fund Manager further clarifies that there are no transactions with related parties or transactions involving conflicts of interest in this transaction
The Impact Caused by the Event
The impact of this this event expected to be positive after transferring property ownership to the Fund, by increasing net revenue after deducting fund fees, and expanding weighted average lease expiry (WALE).