Swicorp Wabel REIT’s initial public offering (IPO) will start today on the Saudi Stock Exchange (Tadawul), with subscription for 15 working days until April 8.
Subscription will be available through Swicorp Co.’s website and receiving entities namely Bank Albilad, Banque Saudi Fransi, Al Rajhi Bank, NCB, and Aljazira Capital, with a minimum subscription of SAR 500.
With a target size of SAR 1.18 billion, the fund will offer 35.4 million units at SAR 10 per unit, totaling SAR 354 million. This represents 30 percent of the fund size.
The asset base of the sharia-compliant fund includes four fully developed and income-generating shopping malls, namely the Al Makan Malls located in Riyadh, Tabuk, Hafr Al-Batin, and Dawadmi.
Swicorp said that most assets are located in cities with high demand for commercial and entertainment properties, mainly due to weak supply. The shopping malls in the fund’s portfolio are newly built, with the oldest mall constructed in 2015.
Key features of the Swicorp Wabel REIT are as follows:
- During the offering, the fund gives a targeted net yield to investors of 7.7percent.
- The properties are anchored by 423 major local and international retailers, with 50 percent of the contracts’ duration ranging between five and 20 years.
- There is an annual rent increase clause in more than 50 percent of the existing contracts.
- Property sellers and the fund manager will invest 70 percent of the fund size.
- Wabel Al Arabia, the main owner of the fund’s assets, has agreed to a 6-month lock-up period during which it will not reduce its shareholding below 50 percent in the fund.
- The fund is debt free during the IPO, which is positive for its future expansion plans.
- Wabel Al Arabia has issued an Order Note of SAR 18 million guaranteeing any rental shortfall for two years.
- Although all assets are newly built and operated, their current average occupancy rate is 96.38 percent.
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Swicorp Wabel REIT - Details |
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Fund name |
Swicorp Wabel REIT |
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Fund Manager |
Swicorp Co. |
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Investment Goals |
- The fund invests in developed, income-generating real estate assets. It plans to distribute no less than 90 percent of its income to unit holders. -The fund will invest a minimum of 75 percent of its assets in developed real estate assets that generate regular rental income. -It will not invest in white land. |
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Fund term |
99 years from the listing date, renewable upon obtaining the CMA approval |
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Target assets |
Four malls in Riyadh, Tabuk, Hafr Al-Batin and Dawadmi |
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Offering period |
March 19 – April 8 |
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Fund size |
SAR 1.18 billion |
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Units |
35.4 million |
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Offering size |
SAR 354 million |
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Price per unit |
SAR 10 |
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Minimum Subscription |
SAR 500 |
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Subscription fee |
1% of subscription amount per investor (including VAT) |
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Receiving entities |
Bank Albilad, Banque Saudi Fransi, Al Rajhi Bank, NCB, and Aljazira Capital (in addition to the fund manager Swicorp Company) |
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