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

Logo of Alinma Investment Co.

Alinma Investment Co., 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 SAR 380 million (excluding real estate transaction tax).

The deal doesn’t include brokerage fees.

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

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

The building is leased to a mix of tenants (government agencies, semi-government, international companies and 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 purchase will be financed through credit facilities from Alinma Bank, the statement added.

Due to the guaranteed grace period for some tenants, the company 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 will receive 1% of the purchase price of each real estate asset in exchange for the fund manager conducting the necessary investigation and negotiation.

Alinma Investment has waived the transaction fees for this property to benefit the fund and its unitholders.