Jadwa Al Haramain buys SAR 148 mln properties in Makkah

Jadwa REIT Al Haramain Fund completed on Sunday the acquisition of two properties worth SAR 148 million in Makkah.

The first luxury building was valued at SAR 125 million and will provide hospitality services for Pilgrims and Umrah visitors, the fund said in a bourse statement.

It was leased at SAR 8 million per Hijri year with a preliminary yield of 6.4 percent (or 6.6 percent per calendar year).

The second commercial building, which will comprise retail showrooms, was valued at SAR 23 million. The property was leased at a total value of SAR 1.5 million per Hijri year with a preliminary yield of 6.5 percent (or 6.7 percent per calendar year).

Both assets were financed from Sharia-compliant facilities, with lease terms that begin from the acquisition date and end in August 2021.

The acquisitions, which were unanimously approved by the fund’s board of directors, will increase Jadwa Al Haramain’s funds from operations by 11 percent in 2018, compared to the target percentage before the deal conclusion.

The deal will also reflect positively on the fund’s cash distributions going forward, Jadwa Al Haramain added.

The asset purchases came as part of the fund’s strategy, which is aimed at enhancing value for unit holders through buying high-quality assets located in Makkah and Madinah.