Alistithmar REIT signs SAR 17.5M commercial guarantee agreement for owned asset

The agreement to have a positive impact on the fund by enhancing the stability of cash flows.

Alistithmar Capital, in its capacity as manager of Alistithmar REIT Fund, signed a commercial guarantee agreement with AREIC RED.

In a statement to Tadawul, the company said the agreement was signed today, June 18, under which the guarantor irrevocably and unconditionally guarantees a minimum annual net operating income (NOI) of SAR 17.5 million for the fund-owned property, Somerset Downtown Al Khobar, for four years from Oct. 1, 2025.

The company added that if the actual NOI falls below the guaranteed minimum in any year during the guarantee period, the guarantor will pay the shortfall to the fund in accordance with the terms of the agreement. It noted that AREIC RED was appointed property manager for the fund’s real estate assets on July 11, 2024.

Alistithmar Capital expects the agreement to have a positive impact on the fund by enhancing the stability of cash flows generated by the underlying asset and mitigating risks associated with cash flow volatility, thereby supporting more predictable income streams and safeguarding the interests of unitholders.