Musharaka Capital Company announces a fundamental development regarding the Musharaka REIT Fund
13 March 2022
Musharaka Capital Announces Binding Agreement for the Acquisition of a New Property (Ferdin Tower) in Riyadh
Musharaka Capital, as the fund manager of the Musharaka REIT Fund, has signed a binding agreement to acquire a new property, Ferdin Tower, located in Riyadh, for a total value of SAR 235,000,000 (excluding real estate transaction tax and brokerage fees). The acquisition follows valuations from two certified real estate appraisers. The target property boasts a strategic location at the intersection of King Fahd Road and Prince Mohammed bin Abdulaziz Road (formerly Al-Tahlia Street) and is a fully leased mixed-use commercial and office building.
Property and Transaction Details:
- Country: Saudi Arabia
- City: Riyadh
- Location: Al-Olaya District, at the intersection of King Fahd Road and Prince Mohammed bin Abdulaziz Road (formerly Al-Tahlia Street)
- Usage: Commercial and office spaces
- Land Area: 3,212 square meters
- Total Building Area: 25,591 square meters
- Leasable Area: 16,700 square meters
- Occupancy Rate: 100%
- Acquisition Value: SAR 235,000,000 (excluding real estate transaction tax and brokerage fees)
- Net Annual Yield: 7.4%
- Lease Terms: Varying durations
- Number of Tenants: 33 tenants
- Revenue Distribution: 59% of the property’s rental income comes from four major corporate tenants
- Lease Guarantees: Promissory notes for showroom leases covering five years
Expected Completion & Financing:
The legal and administrative transfer of ownership is expected to be completed within 90 days from the announcement date, subject to regulatory approvals. The acquisition will be financed through the fund’s available Shariah-compliant bank facilities.
Impact on the Fund:
The fund manager anticipates a positive financial impact from this acquisition, starting from Q3 2022. The deal will contribute to:
- Reducing asset concentration
- Enhancing portfolio diversification
- Expanding geographic exposure within Riyadh
- Improving rental income and generating additional cash flow for the fund