Jadwa REIT Saudi says Dammam tower sale ‘negative’ in short term

Logo of Jadwa REIT Saudi Fund

Jadwa Investment Co., the fund manager of Jadwa REIT Saudi Fund, announced that the sale of Al Yaum Tower in Dammam, if completed, will have a negative short-term financial impact.

The transaction is expected to result in losses of SAR 11.09 million, with loss per unit at SAR 0.06.

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Meanwhile, the transaction is expected to have a positive long-term impact on Jadwa REIT Saudi’s performance, added Jadwa Investment.

The fund acquired the property in February 2018 for SAR 275 million with a -30.91% difference between the acquisition and announced sale prices.

According to the latest financial statements, the property’s book value is at SAR 201.84 million and the difference between the book value and the announced sale price is -5.86%.

Jadwa Investment signed, on June 30, an agreement to sell Al Yaum Tower for SAR 190 million, excluding real estate transaction tax.

The proceeds could be geared towards many avenues, such as acquiring more accretive income-generating real estate assets and partially paying off existing credit debts, which would alleviate the fund's financial liabilities, the fund manager said.