Alinma Makkah Fund to buy hotels, malls for SAR 6 bln

Details

Fund

Alinma Makkah Fund, a closed Islamic income-generating real estate fund.

Investment purposes

Generating periodic rent income for unit holders through acquiring developed properties in hotel and hospitality sector and commercial malls within the first stage of Jabal Omar project

Fund size

SAR 6.09 bln

Unit price

SAR 10

Minimum Subscription Limit

SAR 10,000

Maximum Subscription Limit

SAR 5 bln

Fund Manager

Alinma Investment

Fund duration

Five years, can be extended for a period of one year unless terminated in accordance with the terms and conditions.

Cash Dividend

Semi-annual cash dividend for unit holders of not less than 90% of the fund’s net profit.

Property purchase agreement

Agreement date

March 21, 2017

Purchase price

SAR 6 bln

Type of agreement

Buy and sell agreement with option condition

Properties

Hilton Suites Makkah, Hyatt Regency Hotel, Conrad Makkah Hotel, and associated shopping malls on an area of 15,962 sqm in the Jabal Omar Project (excluding apartments within the property).

Lease agreement

Buyer may rent the property to the seller for 10 years

Repurchase right

The buyer (REIT) gives the seller (Jabal Omar Co.) the right to repurchase the assets at anytime starting from the sixth year  until the tenth year at the same purchase value (SAR 6 bln) with a 6 month notice period before the purchase. The repurchase is forfeited at the end of the ten-year or upon both parties’ agreement.

Lease contract items

Item

Description

Tenant

Jabal Omar Development Co.

Contract start date

From REIT operation date

Contract duration

10 years

Allowed use

Hotels and malls

Total annual rental value

SAR 540 mln

Rent payment method

Payable in two semi-annual installments starting from REIT operation date