Logo of Alinma Hospitality REIT Fund
Alinma Hospitality REIT Fund will be listed on the Saudi Exchange (Tadawul) today, Jan. 30, with the symbol 4349 and ISIN code SA15L0523UH6, at a price of SAR 10 per unit.
The fund size is SAR 1.02 billion. It brings the total number of REITs on the Main Market to 18.
The Capital Market Authority (CMA) approved in September 2022 the request received from Alinma Investment Co., the fund manager, to offer and register units of Alinma REIT Hotel Fund in the market as publicly traded units of a real estate investment fund.
Subscription to the fund units took place during the period from Oct. 30 to Nov. 7, 2022. A minimum of 50 units were allocated to each subscriber, while the remaining shares were allocated on a pro rata basis.
The number of subscribers reached 184,600, while total proceeds (excluding the subscription of the fund manager) amounted to SAR 560.9 million.
The fund's investment objective is to achieve continuous and growable cash dividends for unitholders and to develop the fund’s assets through direct investment in structurally developed and income-generating real estate.
The fund intends to focus heavily on the hotel, hospitality and tourist accommodation sector in its investments. The fund may invest partially in real estate development projects, provided that the fund assets invested in income-generating assets are not less than 75%.
The fund intends to initially acquire five income-generating real estate assets, all of which are freehold. These assets serve the hotel, hospitality and tourist accommodation sector.
These assets are represented in Vittori Palace Hotel in Riyadh, Ascott Rafal Hotel in Riyadh, Comfort Inn & Suites Hotel in Jeddah, Comfort Inn Olaya Hotel in Riyadh, and Clarion Hotel Jeddah Airport.
Seera Holding Group announced earlier its contribution to the establishment of Alinma REIT Hotel Fund through three real estate assets owned by it in Riyadh and Jeddah – Clarion Airport Hotel (Jeddah), Comfort Suites Hotel (Jeddah), and Comfort Inn Olaya Hotel (Riyadh).
The fund said that the three assets will be purchased by Seera Hospitality, adding that part of the purchase price will be in-kind units in the fund. Comfort Inn Olaya Hotel (Riyadh) and Clarion Airport Hotel (Jeddah) will be released by Seera Hospitality. These contracts represent 22% of the fund’s total target returns.
Meanwhile, Comfort Inn & Suites will be operated by Seera Hospitality, under a hotel property management and operation contract.
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Fund Name |
Alinma Hospitality REIT Fund |
|
Fund Type |
Shariah-compliant, closed-end public real estate investment fund, established in accordance with the applicable REIT regulations. |
|
Investment Objectives |
The fund's investment objective is to achieve continuous and growable cash dividends for unitholders and to develop the fund’s assets through direct investment in structurally developed and income-generating real estate. |
|
Fund Size |
SAR 1.02 bln |
|
Value of In-Kind Units |
SAR 508.62 mln |
|
Target Value of Offering |
SAR 511.40 mln |
|
Unit Price |
SAR 10 |
|
Fund Manager's Subscription (Cash) |
10 mln units |
|
Transaction Fees |
The fund shall pay a transaction fee equivalent to 0.75% maximum of the value of each sale or purchase of a real estate asset paid to the fund manager in return for conducting due diligence and negotiation. These fees shall be due immediately after the completion of the transaction. These fees shall not apply to the fund’s constituent portfolio. |
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Fund Management Fees |
At 9% of net operating income annually. It will be paid semiannually and calculated for every year. The management fees should not exceed 0.8% of the fund’s total assets. The fund manager has the right to waive or deduct any dues. In case the fund incurs a net loss from operations, the fund manager shall receive no fees for the said year. |
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Custodian Fees |
SAR 100,000 annually. There may be a change in prices later, provided that these fees do not exceed SAR 300,000 maximum. |
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Fund Manager |
Alinma Investment |
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Fund Duration |
99 Gregorian years starting from the date of listing |
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Dividend Policy |
Subject to the financing agreements that the fund may conclude, the fund manager aims to distribute dividend at least twice per year, provided that the distributions are not less than 90% of net profit. Dividends will be distributed in January and July of each year, except for capital gains resulting from sale of any assets, which will be reinvested in structurally developed real estate that is capable of achieving periodic and rental income, with the aim of increasing the size of the fund's real estate assets. |
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Fund's Unitholders/Subscription Details |
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Entity/Type |
Number of Units (mln) |
Ownership (%) |
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Public (cash) |
41.14 |
40.33% |
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Fund manager's subscription (cash) |
10.00 |
9.80% |
|
Seera Hospitality (in-kind) |
17.26 |
16.92% |
|
Ashaad (in-kind) |
33.60 |
32.94% |
|
Total |
1020.0 |
100% |
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