SEDCO Capital REIT paid target dividends: fund manager

SEDCO Capital REIT Fund’s dividends are unlikely to see any adverse impact going forward, despite the losses incurred in three months to June 30, fund manager SEDCO Capital said on Thursday.

“The fund has already paid its target annual dividend at 6.1 percent, and is aiming to improve its portfolio diversification and maintain stable operating performance,” SEDCO Capital added.

On Aug. 2, the fund reported net losses of SAR 17.29 million for the three months ending on Jun. 30, 2018, Argaam reported.

It also announced a plan to pay a 1.53 percent cash dividend for the Q2 2018, at SAR 0.1525 per unit, amounting to SAR 9.15 million.

Meanwhile, the fund manager added that the incurred losses are “interim” and do not reflect the REIT’s operating performance.

SEDCO Capital REIT’s normalized operating profit stood at SAR 7.31 million, after settlement of SAR 2.09 million in amortizations and book value impairment provision of SAR 22.51 million, in line with the applicable IFRS.

The net book value of the fund’s assets was reduced in line with the latest average evaluations made by the accredited assessors.

Accordingly, the net asset value (NAV) – based on this book value – came in at SAR 9.71 per unit.

However, NAV would have reached SAR 9.83 per unit, implying a decline of 3.10 percent, when compared to the acquisition value, if assets were recorded by market value, with the net increase in value at SAR 6.98 million taken into account.

Leasing revenue hit SAR 11.36 million, though the annual leasing value exceeds SAR 40 million regardless of a potential increase in contract value and acquisitions.

“The fund’s assets showed solid performance and are unique for their prime location and stable demand,” the fund manager added.

Last month, the REIT completed the acquisition of a property which is currently occupied by Banque Saudi Fransi's Al Andalus branch in Dammam for SAR 27.25 million.

The property has an annual rent of SAR 1.5 million over a ten-year period starting November 2015.

The acquisition is consistent with SEDCO Capital's strategy to acquire quality real estate assets and build a well-diversified portfolio to enhance returns to unit holders, the fund manager said.