Mulkia Investments sees strong interest in REIT IPO, says MD

Mulkia Investment Co. is expecting strong investor interest in its planned initial public offering (IPO) for Mulkia-Gulf Real Estate Investment Trust (REIT) on Tadawul, Sultan Al-Hudaithi, managing director, told Argaam in an exclusive interview on Sunday.

The strong response will be driven by the fund’s geographical and sector diversification as the new vehicle will allow investors to inject funds in a diversified real estate portfolio.

He added that the company is mulling several opportunities in promising sectors, such as education, healthcare and food.

Q: Mulkia, set up four years ago, is a relatively new company. Can you give as more details about Mulkia’s profile and development?

A: Mulkia is a closed joint stock company with SAR 150 million in authorized capital and SAR 75 million paid-in capital. It was licensed by the Capital Market Authority on November 5, 2013 to provide securities services, including management of investment fund and client portfolios, advisory, arrangement, underwriting and custody services.

Mulkia commenced operations on April 28, 2014 and was established by several Saudi businessmen.

Q: What about the investment products offered by Mulkia?

A: The company started by managing private portfolios. Afterwards, it launched Mulkia IPO Fund and Mulkia Saudi Equities Fund in August 2014. Mulkia also established another fund to invest in commercial complex development in July 2015 and its Mulkia Real Estate Income Generating Fund on September 1, 2016.

Mulkia Private Equity – Education was also offered in a private placement. The latest product is Mulkia-Gulf Real Estate Investment Trust (REIT), Mulkia’s sixth fund since establishment.

Q: What is your vision for Mulkia Investment?

A: We aim to be a leading asset and wealth manager in the Middle East, through providing more innovative, comprehensive solutions to meet client needs.

Q: How can you evaluate REITs offering in the local market?

A: Performance of REITs on the Saudi exchange year to date and subscription ratios reflect growing momentum for such funds, following their success in global markets. REITs provide retail investors with access to high-grade, low-risk, income-generating real estate assets.

Accordingly, they are one of the top choices for investors that seek a stable income, compared to direct investment in real estate equities.

Q: Following the market regulator’s approval for offering Mulkia-Gulf REIT in Tadawul, what are your expectations for investor response to the IPO?

A:  We expect strong investor turnout to the offering, as more options were facilitated to allow participation of investors. The strong response will be also driven by the fund’s geographical and sector diversification as the new vehicle will enable investments in a diversified real estate portfolio.

Q: How do you see REITs impacting the property market?

A: Given their positive role in the growth of real estate markets across many countries, REITs are major investment opportunities for local developers. REITs will also facilitate other mega projects going forward, which will bolster the property market and local economy.

Q: What about Mulkia’s future plans?

A: Mulkia is aiming to expand in arrangement and advisory services for potential acquisitions. It has provided advisory services worth almost SAR 500 million since establishment.

Mulkia is mulling several opportunities in promising sectors, such as education, healthcare and food.

The company will also continue offering new innovative products across the Kingdom.