Jadwa REIT Al Haramain’s temporary fee waiver to lower negative impact of COVID-19 measures

Jadwa Investment, fund manager of Jadwa REIT Al Haramain Fund, temporarily suspended management fees, equivalent to 1% of the fund’s net asset value, due to the direct impact of the COVID-19 outbreak on the fund’s assets.

The fund manager said in a bourse filing on Monday that the precautionary measures, including the suspension of Umrah, have led to the suspension of the fund’s rents.

The suspension of fees will apply from the date of rent suspension for tenants (March 1, 2020) until the rent collection resumes for any property.

The move will help mitigate the expected negative impact on the fund, the statement said, noting any material developments will be announced in due course.

The fund enjoys good levels of liquidity, supported by the fund manager’s decision to reduce cash dividends for the second half of 2019. In addition, the decline in financing costs linked to SIBOR, will contribute to reducing the expected impact.

Jadwa Investment will continue to monitor the market and assess opportunities to acquire income-generating properties, given the fund’s low level of leverage at 21% of total fund assets as of the latest audited financial statements.

On March 29, the fund manager said it received a notice from tenants of Tharawat Al Taqwa Hotel and Pharmacy Building, the two properties owned by the REIT, to temporarily suspend lease contracts until the authorities lift the suspension.