Derayah Financial, the fund manager of Derayah REIT, announces the signing of a purchase agreement on 25/10/2018G to acquire a commercial building in Jeddah for a total consideration of SAR45 million. The expected timeframe to complete the transfer of the Property is 30 days, extendable by mutual consent.
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 will be entirely leased to the current 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 the tenth year of the lease. The Tenant shall provide promissory notes covering the lease payments throughout the lease duration.
It is expected that ownership of the Property will be transferred within 30 days from signing the agreement, extendable by mutual consent. The acquisition will be financed through the banking facilities available to Derayah REIT
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. Derayah Financial will announce any material development as and when they occur.