Addendum announcement from Musharaka Financial Company regarding a fundamental development in Musharaka REIT Fund

Musharaka Financial Company is pleased to announce the completion of all regulatory procedures related to the acquisition of one of the largest self-storage warehouses in the Middle East, located in the Emirate of Dubai, UAE. The transfer of property ownership to the fund has been finalized. The acquisition value amounted to approximately 47,000,000 Saudi Riyals, funded through the bank facilities available to the fund and compliant with Sharia principles.

A long-term lease agreement has been signed with The Box Self Storage, a limited liability company known for its self-storage services. The lease will begin on October 1, 2020, and end on September 30, 2045 (25 years with an option to extend for an additional 5 years). The lease term is binding, with advance bank cheques received from the tenant. The annual rental value for the property is 4,000,000 AED, with a 10% rental increase every five years.

Musharaka Financial would like to highlight that the completion of the acquisition was carried out after appointing Hussein Loutah & Partners – Lawyers & Legal Advisors, and in collaboration with a group of global real estate companies and accounting firms to gather the most accurate information and details regarding the property and tenant, ensuring the validity of all submitted documents.

The fund manager wishes to clarify that the financial impact of this acquisition will be positive, with an increase in the fund’s profits and a reduction in the risks of potential revenue decline in the future. Additionally, the long-term and binding nature of the lease contract will contribute to cash flow savings for the fund.