Mulkia Gulf Real Estate REIT Fund started a legal action against Saba Real Estate Company Ltd, the tenant of Jeddah Dinar Commercial Building, requesting payment of the rental dues owed to the fund, Mulkia Investment Co., the fund manager, said in a bourse statement.
Several measures were taken to solve the problem and reach an amicable solution. However, no solution has been reached with the tenant.
Accordingly, the fund manager initiated arbitration procedures based on the lease agreement signed with the tenant. Moreover, a law firm was licensed to follow up the matter with the arbitration committee, the competent court and the relevant authorities.
The lease agreement signed with Saba Real Estate is a seven-year binding contract that ends in Oct. 18, 2024, at a total value of SAR 9.96 million. The due rentals date back to over one year until the announcement date, the fund manager added.
The tenant will be requested to pay full rent when it is due, based on the lease contract.
The related financial impact will be determined upon the arbitration committee decision, but currently it is difficult to estimate this impact on the fund's activities, the statement said, adding that a provision will be considered in the fund's financial statements, as per the related regulations.
The fund manager will duly announce any relevant updates.