Alinma Retail REIT signs deal to purchase office property in Riyadh for SAR 380M

Alinma Investment Company, in its capacity as fund manager of Alinma Retail REIT Fund, announced signing an agreement, on Nov. 17, to purchase an office property in Riyadh for a price of SAR 380 million (Excluding real estate transaction tax), and the deal is doesn’t include brokerage fees.

In a statemen to Tadawul, the fund manager said that the financial impact of the deal is expected to be generally positive, and to be reflected in the fund’s results starting next year.

Under the contract, the property is an office complex built on a land area of 14,880 square meters, with a built-up area exceeding 65,000 square meters, and located in Al-Qirawan district, in Riyadh.

The building is leased to a mix of tenants (government agencies, semi-government, international companies, private companies), with the net income of the property is expected to reach SAR 34 million (8.95% of the property price).

The property is strategically located and has been recently renovated.

The agreement is conditional on completing a due diligence examination for the property, the purchased to be financed through credit facilities from Alinma Bank, the statement added.

Due to the guaranteed grace period for some tenants, it was agreed with the seller to postpone payment of part of the price until the grace period ends and the rent for the entire property is due.

As mentioned in the terms and conditions, the fund manager receives 1% of the purchase price of each real estate asset in exchange for the fund manager conducting the necessary investigation and negotiation, however, in order to achieve a positive impact over the fund and unitholders, Alinma Investment has waived the transaction fees related to this property, the fund manager further indicated.