SEDCO Capital REIT OKs MoU signing to acquire Riyadh office tower for SAR 707M

SEDCO Capital REIT fund manager said the property is structurally complete and currently in the final fit-out stage

SEDCO Capital, in its capacity as the manager of SEDCO Capital REIT Fund, announced the board’s approval to sign a memorandum of understanding (MoU) to acquire an office tower in the Al Yasmin district of Riyadh.

In a statement to Tadawul, the fund manager said the tower, covering a land of around 8,037 square meters, has a total built-up area of nearly 99,200 square meters, including basement parking. The expected transaction value is SAR 707 million, excluding acquisition fees, transaction execution costs and taxes.

The property is structurally completed and currently in the final fit-out stage.

Under the agreement, the seller will be required to lease back the tower for a mandatory three-year period, generating annual rental income of approximately SAR 69 million, equivalent to a 9.8% yield on the acquisition value.

Completion of the transaction is subject to a number of regulatory conditions, including, but not limited to, completing the procedures to increase the fund's total asset value through the issuance of additional units, completing legal, technical, and financial due diligence, and obtaining approvals from the Capital Market Authority, Saudi Exchange (Tadawul) and the fund's unitholders.

The fund manager will disclose any material developments related to the transaction in due course, in accordance with the applicable rules and regulations.

SEDCO Capital expects that, upon completion of the increase in the fund's total asset value and the acquisition of the property, the transaction will positively impact the fund's real estate portfolio, supporting its performance and future financial results.