Derayah Financial Announces Material Development Relating to Derayah REIT (The Acquisition and Transfer of a Logistic Real Estate Asset in Jeddah)
Derayah Financial, the fund manager of Derayah REIT, announces the acquisition and transfer of a logistics real estate asset in Jeddah on Thursday 22/11/1440H corresponding to 25/07/2019G as the legal and technical procedures were completed successfully. The purchase price is SR44 million which was funded through the available banking facility for Derayah REIT.
The property is located in Al-Sarawat district in Jeddah, and positioned on the east of King Faisal Rd. The property is a logistic complex consisting of 5 stand-alone warehouses of different sizes within an enclosed perimeter. The property’s total built-up area is 25,800 sqm and built on a land area of 40,000 sqm
The property is entirely leased to Jadeer Property Management Company, a related party to the seller, for 5 years (binding) commencing on property transfer date. The tenant provided promissory notes covering the lease payments throughout the lease duration. Additionally, a guarantor agreement is in place to enhance the strength of the lease agreement. The property is already sub-leased to different tenants, and the master tenant will be responsible for insurance, optional expenses and maintenance of the property during the lease term at his own cost. The annual rent of the property is SR4,060,000.
It is expected that the results of the acquisition will be positive on Derayah REIT’s financial performance in the second half of 2019.
Derayah Financial has previously announced on 23/02/1440H corresponding to 01/11/2018G the signing of a purchase agreement to acquire a portfolio of logistics real estate assets in the Kingdom of Saudi Arabia. The property that was acquired today is part of this transaction.
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.