Derayah REIT says court terminates Smart Tower lease contract

Derayah Financial Co., the manager of the Derayah REIT Fund, received a notice from the fund's legal counsel, Naif Mohammed Al Salem Law Firm and Consultants, on a preliminary court ruling issued in favor of the fund, according to a Tadawul statement.

The ruling, issued by the Second Major Cases Circuit of the Riyadh General Court, terminated the electronic lease contract with Al Thamra Al Hadetha Co. for Smart Tower in Riyadh due to non-payment of rent.

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The ruling is preliminary and subject to appeal, the statement said.

The fund manager is concurrently working on several legal actions to retrieve the overdue rent.

The company noted that there would be no immediate impact until a final ruling is issued.

According to data available with Argaam, Derayah Financial announced in November 2024 that the tenant of the Smart Tower had filed a lawsuit against Derayah REIT. The tenant sought to annul the purchase agreement for Smart Tower, signed on Aug. 7, 2017.

In September 2024, the Derayah REIT initiated legal action against the primary tenant to recover SAR 40 million in pending rent.