OSOOL & BAKHEET Investment Company Announces a Material Development to AL Maather REIT Fund
Thursday, September 24, 2020 at 9:40 AM
Description of the Event:
Al-Ma’ather REIT Fund announces that it has entered into an agreement to purchase real estate property in city of Riyadh, Al Salam district. It is an educational facility land of 10,000 square meters in the Al Salam district in Riyadh near the intersection of Abdulrahman Ibn Awf Rd. and Alshabab St. the acquisition value is SAR 17,000,000 (Seventeen million Saudi riyals), the acquisition aims to complete the construction of an educational complex for boys (elementary, middle and high). The building area is approximately 18,634.1 square meters the cost of construction is expected to reach 23,000,000 (Twenty-three million Saudi riyals).
The property has been leased out to Integrated Development For a period of eleven years, provided that the first lease year begins at a value 3,600,000 (Three million and six hundred thousand Saudi riyal) The tenet will pay it in advance for part of the value of the construction currently being built on the property. The rental value will increase, starting from the sixth year at a percentage of 17.5%. The total value of the lease contract is 43,380,000 (forty-three million three hundred eighty thousand Saudi riyals). The tenant will provide rental guarantees in the form of ten-year promissory notes.
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.