Aljazira REIT responds to requests of 4 tenants hit by COVID-19

Aljazira Capital received requests from tenants of properties belonging to Aljazira REIT Fund, which have been affected by COVID-19 pandemic, the fund manager clarified in a statement to Tadawul on Wednesday. 
 

The tenants are: 
 

1- Petromin Co., which represents 18.5% of the REIT’s annual rentals. 

2- H. M. Al Rugaib & Sons Trading Co. Ltd., which represents 13.2% of the REIT’s annual rentals. 

3- Astra Grains Co., Ltd., which represents 19.6% of the REIT’s annual rentals.
 
4- An institution for property management, which represents 11.3% of the REIT’s annual rentals. 
 

The tenants requested suspension of the rents due for a period of three and eight months and rent reduction between 30% and 50% for the upcoming years. 
 

The tenants cited business activity halts, as a result of the partial and complete curfews, amid the preventive measures taken by the competent authorities to control the spread of COVID-19, the statement clarified. 
 

The fund manager mandated the REIT’s operation and maintenance manager to study all requests received from tenants and assess the extent to which the economic activity of each tenant was affected by the precautionary measures. 
 

The statement affirmed the fund manager’s keennessto protect the unit holders’ rights, taking into account the retention of the tenants in such extraordinary conditions. 
 

Accordingly, the fund’s board of directors approved Aljazira Capital’s decisions on the tenants ’requests, as follows: 
 

1- Notifying tenants of rejecting all requests for rent reduction for 2020 or the upcoming years. 

2- Notifying tenants of rejecting requests submitted to suspend rents due for any period exceeding three months. 

3- Granting Petromin, Astra Grains, and the property management institution a grace period of 30 days, to be deducted from their current annual rent. 

4- Granting H. M. Al Rugaib a grace period of 90 days, due to its inability to maintain commercial activity during the curfew period as the company’s operations were hit more than other tenants. 
 

Aljazira Capital added that it expects a negative impact on the REIT’s cash dividends in the current year only, as the fund’s annual revenues are estimated to drop 7.45% in 2020. 

The above-mentioned financial impact does not take into account any other requests that might be received in the future, the fund manager noted. 

The fund manager further affirmed that it is working to maintain the distribution of cash dividends despite the emergency circumstances that have negatively impacted the economy in general and the real estate sector in particular.