Derayah REIT obtains final ruling to terminate Smart Tower lease

Logo of Derayah REIT Fund

Derayah Financial Co., manager of Derayah REIT Fund, received a final court ruling in favor of the fund regarding the lease agreement for Smart Tower in Riyadh with Al Thamra Al Hadetha Co.

The company said in a Tadawul filing that its legal advisor, Naif Mohammed Al Salem Law Firm and Consultants, confirmed the Appeals Court’s 15th civil circuit upheld a prior ruling by the General Court in Riyadh to terminate the electronic lease with Al Thamra Al Hadetha, after the tenant defaulted on rent payments.

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Derayah Financial noted that it is pursuing legal procedures to collect overdue rent in full. It added that the ruling will transfer all sub-leases from the former tenant directly to the fund, enhancing cash flows and strengthening property management, since the previous tenant failed to meet its rental obligations.

According to data compiled by Argaam, the fund had disclosed in June that it received a preliminary judgment to annul the same lease. In November, the current tenant of Smart Tower filed a lawsuit seeking to void the August 2017 purchase agreement of the property.

Derayah Financial had earlier announced in September that it initiated legal action against the main tenant of Smart Tower to recover overdue rent totaling SAR 40 million.