Logo of Alinma Hospitality REIT Fund
Subscription to Alinma Hospitality REIT Fund’s offering will start today, Oct. 30 and run until Nov. 7.
The fund size reached SAR 1.020 billion. It will offer 51.14 million units, representing 50% of the total.
In September, Alinma Investment obtained the CMA's approval on offering Alinma Hospitality REIT Fund’s units in an initial public offering (IPO) on the Saudi Exchange (Tadawul) as a REIT, Argaam earlier reported.
The fund aims to generate sustainable and growing cash dividend for the unitholders and develop the fund assets via the direct investment in income-generating and developed properties.
The fund will largely invest in hotels, hospitality, and tourist accommodation, and may partially invest in the real estate projects, provided that 75% of its investments are in income-generating assets.
The fund initially plans to acquire five income-yielding freehold real estate properties in the hotel, hospitality and tourism accommodation segments.
These assets are Vittori Palace Hotel and Residence in Riyadh, Ascott Rafal Olaya Riyadh, Hotel Comfort Inn Suites Jeddah, Comfort Hotel - Riyadh Olaya and Clarion Hotel Jeddah Airport.
Seera Group Holding announced its contribution with three real estate assets in Riyadh and Jeddah to the establishment of Alinma Hospitality REIT Fund, to be managed by Alinma Investment Co.
Seera indicated the real estate assets are Clarion Hotel Jeddah Airport, Hotel Comfort Inn Suites Jeddah, Comfort Hotel - Riyadh Olaya.
The fund will buy the three assets from Seera Hospitality Co., and the payment will partially be through in-kind units in the fund.
Clarion Hotel Jeddah Airport, and Comfort Hotel-Riyadh Olaya will be released by Seera, and the lease contracts would represent 22% of the fund’s total targeted returns. Hotel Comfort Inn Suites Jeddah will be operated by Seera.
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Key Information |
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Fund |
Alinma Hospitality REIT Fund |
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Type of Fund |
Closed-end real estate investment fund, compliant with Shariah, and established by virtue of the regulations of the real estate investment funds. |
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Investment Objectives |
The fund aims to generate sustainable and growing cash dividend for the unitholders and develop the fund assets via direct investment in income-generating and developed properties
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Fund Size |
SAR 1.020 bln |
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Value of In-kind Units |
SAR 508.62 mln |
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Size of Targeted Offering |
SAR 511.40 mln |
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Percentage of Cash Offering |
50.14% of targeted value |
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Number of Offered Units |
51.14 mln |
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Price / Unit |
SAR 10 |
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Number of Offered Units To Public |
41.14 mln |
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Subscription of Fund Manager |
10 mln units |
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Offering Period |
Units will be offered as of Oct. 30. The offering will run for seven days until Nov. 7. The period can be extended upon the CMA notice. |
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Receiving Entities |
Alinma Investment, Alinma Bank, Al Rajhi Bank, Riyad Bank |
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Minimum Subscription |
50 units |
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Subscription Fees |
None |
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Fees of Transactions |
The fund will pay fees at maximum of 0.75% of the value of each transaction to the fund manager, in return for the due diligence process, directly after completing the transaction. These fees are not applied to the foundation portfolio. |
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Custodian Bank Fees |
SAR 100,000 per annum (subject to changes) to SAR 300,000 maximum |
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Fund Manager |
Alinma Investment |
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Fund Term |
99 years as of listing date |
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Dividend Payment Policy |
In line with the financing deals concluded by the fund, the fund manager targets to pay dividend at least twice a year, at not less than 90% of net profit. The distributions are likely in January and July of every year, with the exception of the capital gains from selling any of the fund assets, as they will be reinvested in developed properties and can generate recurring income with the aim of boosting the fund assets.
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Unitholders/ Details of Subscription |
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Entity/ Type |
No. of Units (mln units) |
Ownership% |
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Public (Cash) |
41.14 |
40.33% |
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Fund Manager Subscription (Cash) |
10.00 |
9.80% |
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Seera Hospitality (In-Kind) |
17.26 |
16.92% |
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Ashaad (In-Kind) |
33.60 |
32.94% |
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Total |
1020.0 |
100% |
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