Mulkia-Gulf REIT buys 76% stake in Vivienda complex for SAR 95 mln

Mulkia-Gulf Real Estate REIT Fund on Wednesday signed an agreement to acquire a 76 percent stake in Vivienda Hotel Villas Al Hada complex for a total value of SAR 95 million.

The deal value will be paid to the project owners, which are not related to the fund manager, Mulkia-Gulf said in a statement to Tadawul on Thursday.

The new acquisition, under the hospitality and leisure sector, will be partly financed by the SAR 18 million in surplus funds resulting from Mulkia's initial public offering (IPO).

The remaining SAR 77 million will be financed through local loans.

The deal is expected to be finalized within two months, the statement added.

The project is owned by Mulkia-Gulf REIT and Mulkia Plaza Development Real Estate Fund, which will hold a 24 percent stake in Vivienda.

Meanwhile, Mulkia-Gulf REIT signed a 20-year lease agreement for the project with Forus Real Estate investment & Development Co.

The rent value will stand at SAR 10.94 million over the first five years, then it will be increased by 7 percent every five years.

The rent will be paid proportionally with the acquisition price, where Mulkia-Gulf's share is estimated at SAR 8.3 million, upon the deal closure.

Under the lease agreement, the tenant will provide an annual bank guarantee equivalent to the value of the following year's rent plus a promissory note renewable for two years.

Mulkia-Gulf REIT added that it expects the development to reflect positively on unitholders' returns.