Riyad REIT Fund invests SAR 233 mln in US logistics portfolio

Logo of Riyad Capital

Riyad REIT Fund invested SAR 233 million in a US logistics portfolio comprising five class A, high-quality, income-generating, newly-built properties, fund manager Riyad Capital said in a bourse filing today, Jan. 3.

These properties are fully leased to investment-grade tenants for an average term of 15 years in four different locations, namely, Missouri, Texas, South Carolina, and Alabama.

The properties were recently developed on a built-to-suit basis to cater for the logistics services, spanning over 4.5 million square feet in Southeast US - the fastest growing region in the US, recognized as an industrial and logistics hub.

The lease contracts extend for 15 years, to be renewable, for three main tenants:

- Amazon ( Rated as A- by S&P, and ranked 2nd in Fortune 500 list with $1.67 trillion in market cap),

- Lowe’s (Rated as BBB+ by S&P, and ranked 44 in Fortune 500 list with $149 billion in market cap), and

- Techtronic Industries (A world leader in cordless technology rated as A- by Moody’s).

The investment came within the fund’s capital increase process by issuing new shares. The process was fully financed by Shariah-compliant short-term credit facilities, which will be repaid after finalizing the capital increase measures.

The investment is expected to generate an average annual yield of 7.5% to Riyad REIT over a four-year investment period.