Musharaka REIT completes legal procedures to acquire Dubai warehouse worth SAR 47 mln
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Musharaka REIT Fund completed the legal and regulatory procedures for the acquisition of one of the largest self-storage warehouses in the Middle East, fund manager Musharaka Capital said in a bourse statement.
Musharaka Capital already received the title-deed for its new SAR 47 million Dubai-based property, which was financed by a sharia- compliant credit facility.
Furthermore, the fund manager signed a new lease agreement with The Box Self Storage for 25 years, commencing on Oct. 1, 2020, for AED 4 million per annum with 10% rental increment every five years.
The lease agreement is irrevocable for the entire 25 years and extendable for another five years, whereby the payments are guaranteed by bank checks.
Musharaka Capital appointed Hussain Lotah Law Firm as the transaction’s legal advisor. Also, the company used other international service providers including real estate agents and accounting firms in conducting due diligence on the property.
The fund manager emphasized that the transaction will have positive impact on Musharaka REIT’s results, by enhancing the fund’s income and reducing any future volatility in the revenue stream.
According to data compiled by Argaam, in May 2019, Musharaka Capital announced the start of the acquisition process of a new property in Dubai at a total value of AED 46 million (SAR 47 million), after been assessed by two independent and accredited valuers.
Jebel Ali First District, Dubai
AED 46 mln
Age of property
25 binding years, extendable for an additional five years
The Box Self Storage Services Company
Net annual income
AED 4 mln
% increase in rental value
10% every five years
48 bank checks with the total rental value for the entire period of the binding contract