Derayah Financial, the fund manager of Derayah REIT, announces the acquisition and transfer of a commercial building in Jeddah to Derayah REIT on Wednesday 22/02/1440H corresponding to 31/10/2018G after a successful completion of all legal and technical procedures. The purchase price is SR45 million which was funded through the available banking facilities for Derayah REIT.
The Property is located in Al-Zahra District in Jeddah, on north of Sari St. between King Abdulaziz Rd. and Prince Sultan Rd. The Property is a commercial building composed of ground floor, four upper floors, a rooftop and a basement for 95 car parks. The Property’s total built-up area is 10,400 sqm built on a land area of 2,700 sqm. The Property was completed in 2014G.
The Property is entirely leased to the previous owner with an annual rent payment of SAR3,825,000/- for 10 years (binding) commencing on Property transfer date. The annual rent will be increased to SAR4,050,000 after the fifth year. The Tenant will have the right to acquire the Property from the Fund for SAR45,000,000/- at the end of the fifth year or at end of the tenth year of the lease. The Tenant has provided promissory notes covering the lease payments throughout the lease duration. Moreover, the Property is subleased to a non-related party until October 2029G.
It is expected that the result of the acquisition will be positive on Derayah REIT’s financial performance in the fourth quarter of 2018. Derayah Financial confirms that there are no related parties in the acquisition except what was mentioned above. Derayah Financial will announce any material development as and when they occur.