Al Rajhi REIT says AlFouzan Trading to move court seeking rent revision for 3 properties

Al Rajhi Capital, the fund manager of Al Rajhi REIT Fund, said it has received a letter from AlFouzan Trading and General Contracting Co. stating that the latter is proceeding to court to seek either a rent-free period or a reduction in rent.

AlFouzan Trading -- the master lessee of Narjees Plaza, Anwar Plaza and Rama Plaza – informed in the letter that the action follows extraordinary circumstances that are beyond their control, due to which it is unable to fully benefit from the intentions of the lease agreements, Al Rajhi Capital said in a statement to Tadawul.

Located in Riyadh, Narjees Plaza, Anwar Plaza and Rama Plaza, are leased to AlFouzan Trading on a triple net basis at combined annual rent of approximately SAR 14.47 million per year (SAR 14.04 million per Hijri year).

The three assets account for 8.7% of the fund’s total revenue, the statement said.

Al Rajhi Capital is ascertaining the validity of the letter and will take all possible action to protect the interest of unit holders, it added.

The situation is evolving and as the outcome of the matter is subject to court’s decision, the financial impact on the fund’s dividend cannot be ascertained at present.

The fund manager will update the unitholders of any material development in the matter.