Jadwa REIT Saudi buys leased land in Jeddah for SAR 500 mln

Logo of Jadwa REIT Saudi Fund

Jadwa REIT Saudi Fund signed a sale and purchase agreement for 161,300 square meter leased land in Jeddah, at a total value of SAR 500 million, excluding taxes and fees, fund manager Jadwa Investment said in a bourse filing.

The land is located in Jeddah on Prince Sultan bin Abdulaziz Road in Al Zahra district, the statement said, noting that the purchase deal will be financed through Shariah-compliant bank facilities.

The property is fully leased to Arabian Centres Co. with a long-term 30-year lease contract, of which 15 years are binding. The lease contract will begin as of August 1, 2022. For the first 10 years of the contract, the rent is SAR 30 million. It will rise to SAR 35 million from the 11th year until the 20th year, and to SAR 42.5 million over the last 10 years of the contract. This will generate an average acquisition yield of 7.18%.

However, the 60-day agreement is subject to completing the technical and legal due diligence.

The relevant financial impact will positively appear on the fund’s financial results as of H2 2022.