Al Mashaar REIT Fund’s manager, Muscat Capital, said that the board of directors agreed with Eskan Development and Investment Co. to collect a rent of SAR 8 million in addition to the value-added tax (VAT) for the period from Jan. 1, 2021, until Dec. 31, 2021.
The decision was made following continuous discussions with the tenant and subsequent to performing analysis of the market conditions prevailing in the hospitality sector in Makkah, taking into account that the global pandemic continues to have a significant negative impact (particularly, those properties not very adjacent to the Holy Mosque, similar to the ones owned by the fund) and the continuing restrictions imposed by the authorities on people eligible to perform Umrah & Hajj, in addition to the possible restricted Hajj season for 2021.
This arrangement is in the best interests of the fund and its unitholders given the overall situation currently prevailing and expected to prevail for the rest of the year, the fund manager said in a bourse statement.
The step will have a negative impact on the fund given that the original rental amount agreed between the fund and Eskan Development & Investment Co. was SAR 38 million.
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