Jadwa REIT acquires two Riyadh properties for SAR 93 mln

Jadwa REIT Saudi Fund has acquired two new properties at a total value of SAR 93 million in Riyadh, the fund manager, Jadwa Investment, said in a bourse filing.

The first property, an office tower, was acquired for SAR 59 million, while the second one, a hotel building, was purchased for SAR 34 million.

Both purchase deals will be financed via the existing Shariah-compliant credit-line facility secured from Banque Saudi Fransi (BSF), the statement said.

The office tower spans 3,300 square meters (sqm) with a built up area of 14,912 sqm, while the hotel building extends on 3,640 sqm with a built up area of 8,597 sqm.

The office tower is leased to a government entity for three years as of June 28, 2018, at SAR 6 million per year with an initial acquisition yield of 10.2 percent.

The hotel is leased to Boudl Trading Company at SAR 2.2 million per year, with a 10 percent increase every six years, in addition to six retail showrooms with an expected lease value of SAR 900,000 per year, and an initial acquisition yield of 9.1 percent.

The hotel lease contract still has 15 years.

The relevant financial impact is expected to appear on Q4 2019 earnings.

The deal has no related parties, the statement added.