Al Rajhi REIT acquires Al Salam NMC Hospital building for SAR 164 mln

Al Rajhi REIT Fund has completed, on Thursday, the acquisition of Al Salam NMC Hospital building in Riyadh for a value of SAR 163.77 million, the fund manager, Al Rajhi Capital, said in a bourse statement.

The acquisition of the property is part of the process of increasing the total value of the fund's assets and has been funded entirely through the available Shariah compliant debt facility for Al Rajhi REIT, the statement added.

Al Salam NMC Hospital is a 100 bed multispecialty hospital. The key specialties are Obstetrics & Gynecology, Pediatrics, Internal diseases, ENT Dept. & General Surgery. It is an independent building consisting of two ground floors in addition to six upper floors.

The Property is fully leased to Al Salam Medical Group, with an annual rent payment of SAR 11.64 million. The annual rent will be increased by 5 percent (five percent) every five years. The current lease with Al Salam NMC Hospital is for a term of 15.75 years starting from April 1, 2018 and the lease agreement is been assigned to Al Rajhi REIT Fund, the fund manager added.

The property also has an additional income of SAR 70,000 from leasing of optical shop and a coffee shop within the premises of hospital. The lease for both these shops has same escalations and terms as that of hospital.

Therefore the total annual income from the property currently is SAR 11.71 million.

The acquisition is expected to have a positive impact on Al Rajhi REIT’s financial performance going forward, Al Rajhi Capital said emphasizing that there are no related parties in the acquisition except the source of financing is from existing debt facility from Al Rajhi Bank.

The fund’s unitholders recently approved increasing the fund’s total assets value from SAR 1.72 billion up to SAR 2.41 billion to acquire new real estate assets, according to data available in Argaam.