Alinma Makkah Fund is set to buy six hotel towers and two commercial malls in the first phase of the Jabal Omar development project in Makkah, at a total value of SAR 6 billion.
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Details |
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Fund |
Alinma Makkah Fund, a closed Islamic income-generating real estate fund. |
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Investment purposes |
Generating periodic rent income for unit holders through acquiring developed properties in hotel and hospitality sector and commercial malls within the first stage of Jabal Omar project |
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Fund size |
SAR 6.09 bln |
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Unit price |
SAR 10 |
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Minimum Subscription Limit |
SAR 10,000 |
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Maximum Subscription Limit |
SAR 5 bln |
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Fund Manager |
Alinma Investment |
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Fund duration |
Five years, can be extended for a period of one year unless terminated in accordance with the terms and conditions. |
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Cash Dividend |
Semi-annual cash dividend for unit holders of not less than 90% of the fund’s net profit. |
The fund will also acquire three five-star hotels and two commercial malls in Al Khalil, sources told Argaam.
The purchase agreement stipulates that the buyer will lease the purchased properties back to the seller (Jabal Omar Development Co.) for a period of 10 years at SAR 540 million per year.
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Property purchase agreement |
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Agreement date |
March 21, 2017 |
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Purchase price |
SAR 6 bln |
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Type of agreement |
Buy and sell agreement with option condition |
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Properties |
Hilton Suites Makkah, Hyatt Regency Hotel, Conrad Makkah Hotel, and associated shopping malls on an area of 15,962 sqm in the Jabal Omar Project (excluding apartments within the property). |
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Lease agreement |
Buyer may rent the property to the seller for 10 years |
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Repurchase right |
The buyer (REIT) gives the seller (Jabal Omar Co.) the right to repurchase the assets at anytime starting from the sixth year until the tenth year at the same purchase value (SAR 6 bln) with a 6 month notice period before the purchase. The repurchase is forfeited at the end of the ten-year or upon both parties’ agreement. |
The Alinma Makkah Fund, which will list on the Saudi Stock Exchange (Tadawul), will pay semi-annual dividends at not less than 90 percent of net earnings.
The fund, which is capitalized at SAR 6.09 billion, will have a five-year term and can be extended for one year.
The Saudi Capital Market Authority (CMA) last month approved a request from Alinma Investment Company to list Alinma Makkah Real Estate Fund on Tadawul.
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Lease contract items |
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Item |
Description |
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Tenant |
Jabal Omar Development Co. |
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Contract start date |
From REIT operation date |
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Contract duration |
10 years |
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Allowed use |
Hotels and malls |
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Total annual rental value |
SAR 540 mln |
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Rent payment method |
Payable in two semi-annual installments starting from REIT operation date |
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