Mulkia REIT signs SAR 600 mln facility agreement with Al Rajhi Bank

Logo of Mulkia Gulf Real Estate REIT

Mulkia Investment Co., the fund manager of Mulkia Gulf Real Estate REIT Fund, announced today, Dec. 29, the signing of a seven-year facility agreement with Al Rajhi Bank.

According to a bourse filing, the agreement aims to reduce financing costs and extend the loan term for the benefit of the unit holders.

The company clarified that the withdrawal limit is SAR 600 million, indicating the fund will use the loan to pay outstanding facilities withdrawn from Bank Albilad amounting to SAR 342.6 million. The remaining amount will use to acquire additional real estate assets.

Finance costs will be paid every six months and the loan's principal will be paid as a bullet payment at the end of the agreement period.

In addition, work will be done to extend the agreement within a sufficient time before the end of the agreement period.

Guarantees include mortgage of real estate assets equivalent to 200% of the value of the withdrawn facilities for Al Rajhi Bank, in addition to promissory notes.

Better profit margin terms and administrative fees will reflect in savings in annual profit margin on financing for the fund. In addition, increasing the financing term for seven years will positively affect the duration of the fund's obligations.

Mulkia Investment confirmed that the fund will not be charged the financing structuring fee stipulated in its terms and conditions for the part that has been refinanced, amounting to SAR 342.6 million.

There are no related parties to the agreement, the statement noted.