Al Rajhi REIT Fund’s initial public offering (IPO) will run from Jan. 1 to Jan. 14, fund manager Al Rajhi Capital said in a statement on Sunday.
The fund manager will offer 42.67 million units at SAR 10 each.
Subscription will be available through Al Rajhi Bank website and Al Rajhi Capital investment centers at a minimum value of SAR 1,000.
Al Rajhi REIT will have a fund size of SAR 1.62 billion, the fund manager said.
The Sharia-compliant fund aims to acquire or invest in income generating commercial, office, and educational assets, as well as warehouses, which are mainly located in the Kingdom, except for Makkah and Madinah.
“The fund’s investment target is to invest in developed, income-generating assets, and to lease and distribute at least 90 percent of the fund’s annual net income in cash over the fund term on a semi-annual basis,” Al Rajhi Capital added.
Al Rajhi REIT’s preliminary portfolio comprises 13 high-quality assets that generate income at the end of January and July of every year.
The fund’s assets are spread across various sectors in the Kingdom, namely: retail (54 percent), warehouses (12 percent), offices (26 percent) and education sector (8 percent).
Eligible investors are Saudis, GCC nationals, foreigners residing in Kingdom, institutions, companies, and investment funds operating in the Kingdom, along with Qualified Foreign Investors (QFIs).
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Al Rajhi REIT Fund - Details |
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Fund structure |
Close ended, Sharia-compliant REIT Fund |
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Offering period |
Ten business days |
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Investment targets |
Invest in developed properties that generate regular income |
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IPO amount |
SAR 426.7 mln |
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Fund’s target size |
SAR 1.621 bln |
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Value of in-kind subscriptions |
SAR 795.3 mln |
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Total number of units following IPO |
122.2 mln |
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Total assets following IPO |
13 |
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Weighted average of lease expiry period |
7.2 years |
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Properties’ occupancy level |
98.93 percent |
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Target net yield in 2018 |
6.16 percent |
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Lock-up Period |
Al-Rajhi Capital (The Fund manager) owns 9.75 percent shareholding into the fund’s capital. This shareholding is subject to a two-year lock-up period from the date of listing (i.e. the Company cannot sell out this stake during the said period). |
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Management fee |
0.80 percent annually of fund’s total value after expenses |
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Subscription fee |
2 percent of the investment value (charged at the time of subscription) |
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Custody service fee |
The fund will pay SAR 100,000 to the custodian on a quarterly basis |
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Financing |
The fund manager can on behalf of the fund secure Sharia-compliant financing at 50 percent maximum of the total value of the fund’s assets |
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Minimum investment |
SAR 1,000 |
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Maximum investment |
SAR 60 mln |
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Fund manager |
Al Rajhi Capital |
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Custodian |
KASB Capital |
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Fund term |
99 years from the listing date, renewable upon the CMA approval |
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Cash distributions |
90 percent of the fund’s income on a semi-annual basis |
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Receiving entities |
Al Rajhi Bank website, Al Rajhi Capital investment centers |
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Fund trading |
The trading method applicable on Tadawul |
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