Since the Capital Market Authority (CMA) announced the instructions for Real Estate Investment Trusts (REITs) in October of last year 2016, the Saudi market has witnessed the listing of 8 income-generating REITs, Some of them achieved great success in the subscription that exceeded the expected, and others achieved rewarding profits during short periods, which promises the future of this type of investment, in this special supplement we review some of the funds that have been listed.
1 - Riyadh Fund plans to buy 3 properties worth 1.1 billion riyals
Riyad REIT is the first REIT, listed last November, and its capital at listing was 500 million riyals, and its investment portfolio consists of several properties with diversified uses located in Riyadh, Jeddah, Dammam and Khobar.
1Riyad REIT is the first ETF.
The fund mainly aims to distribute periodic profits to unit holders at a rate of not less than 90% of net realized profits, by owning income-generating commercial real estate assets, whether through leasing or direct operation, and the fund practiced its investment activity achieving high profitability benefits, and acquired many strategic properties such as "The Residence" center, whose transaction amounted to 136.62 million riyals, with an area of 15 thousand square meters, and plans to buy 3 properties in Riyadh and Jeddah for a total amount of approximately 1.1 billion riyals.
2: 75% of assets invested
The Capital Market Authority (CMA) has approved the offering, registration and listing of Al Jazira Mowatan REIT as a Real Estate Investment Trust (REIT). The REIT invests in structurally upgraded properties that generate recurring income and distributes at least 90% of net profits in cash to investors during the life of the fund and once a year at a minimum during the third quarter of each year if rents are collected.
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The Fund's strategy is to invest at least 75% of its total asset value as per the latest audited financial statements in rental or leasable properties, and 11.8 million units have been offered for initial subscription
The Fund's strategy is to invest at least 75% of its total asset value as per the latest audited financial statements in rental properties.
The fund is primarily invested in Jeddah's Khumra warehouses, which are wholly owned by Al Jazeera Mawtan Real Estate Income Fund.
The fund is primarily invested in Jeddah's Khumra warehouses.
3- Jadwa REIT Al Haramain: Profits in 75 days
<p class="p2The fund was oversubscribed at listing by approximately SAR 4.53 billion, with approximately 5,800 subscribers, exceeding the planned 1257%,
Jadwa Reit Al Haramain Fund.
The fund achieved great success, as its profits resulting from operations amounted to about 6.6 million riyals in less than 75 days only and will be distributed in cash to the owners of the fund's units for the period starting from the date of operation of the fund 16/04/2017 until 30/06/2017, and the number of units eligible for distribution: 66 million units, with a unit share of SAR 0.10 per unit.
<p class=”p14- Taaleem REIT: Working in Riyadh
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The fund was listed on the capital market last May and Saudi Fransi Capital announced that the fund was oversubscribed by 1,890TP3T, with subscription proceeds amounting to SAR 760.9 million and the value of the units offered amounting to SAR 85.5 million. The fund was listed on the capital market in May.
The fund is managed by Saudi Fransi Capital and aims to provide current income to investors by investing in income-producing real estate assets located in the Kingdom, specifically the city of Riyadh. The fund is managed by Saudi Fransi Capital.
5 - Al Mather REIT: Total underwriting proceeds of SAR 2.8 billion
The Al Mather REIT was listed last June with a coverage ratio of 1520% and gross subscription proceeds of SAR 2.8 billion. 5 - Al Mather REIT.
The listing of Al Mather REIT is the fifth listing of REITs in the Saudi market, and all of the fund's primary investments are located in Riyadh, but in order to diversify investments, the fund may invest in the rest of the Kingdom in addition to the possibility of investing a maximum of 25% of the fund's total asset value in real estate located outside the Kingdom. The Al Mather REIT is the fifth ETF to be listed in the Saudi Arabian market, and the maximum investment amount is 25% of the fund's total asset value.
6 - Musharaka REIT: 12k subscribers
"Last August, the Musharaka REIT succeeded in covering its shares by 1021 % and the number of subscribers exceeded 12 thousand subscribers among individuals and financial institutions who invested 3.8 billion riyals,
Musharaka REIT will be offered in the market as a publicly traded REIT.
7 - SAR 6.09 billion capital of Alinma Makkah Real Estate Fund
With a capital of SAR 6.09 billion, the Capital Market Authority approved the public offering of units of Alinma Makkah Real Estate Fund after an application submitted by Alinma Investment Company, provided that the duration of the fund is five years, extendable for a similar period.
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The main objective of the fund is to acquire developed and income-generating properties in the hotel and hospitality sector and commercial centers in the Holy City of Makkah, specifically located within the first phase of the Jabal Omar project next to the Grand Mosque.
These assets will be leased back to Jabal Omar Development Company for 10 years at a yield of SAR 540 million, The fund's assets consist of:
The fund's assets consist of:
- Three hotels: Hilton Suites, Hyatt Regency, and Conrad.
- Two malls (Hebron Market): Two malls with four floors each.
Two malls with four floors each.
8 - Gulf Real Estate REIT achieves SAR 3.95 billion The total value of the Gulf Real Estate REIT subscription that took place last September achieved about 3.95 billion riyals and the number of subscribers reached about 27,844 thousand subscribers among individuals, institutions and investment funds, with a coverage ratio of 20 times.
The units will be allocated equally among all subscribers according to the total value of the units offered, which amounted to 198.5 million riyals.
The fund will seek to offer the opportunity to invest in a diversified portfolio in terms of asset quality and geographical distribution in three major cities in Riyadh, Jeddah and Dammam. The size of the fund is SAR 600 million and the value of gross rentals from the assets targeted for acquisition is estimated at SAR 46.2 million per year. The fund manager will distribute at least 90% of the rentals received to unit holders. The value of rentals received will be distributed by the fund manager to the unit holders.
