Reports indicate that the market value of the real estate fund sector (four funds) has risen by 39 percent since their listing on the market, amounting to 607 million riyals, reaching 2.17 billion riyals, compared to the funds“ nominal value (their size or capital), which stands at 1.56 billion riyals.
The increase in market value resulted from a rise in the unit price of the ”Riyadh REIT“ to 12.4 riyals, the ”Al-Jazirah Mawtan REIT“ to 22.4 riyals, and the ”Jadwa Al-Haramain REIT“ to 12.8 riyals, and the ”Ta’leem REIT“ to 15.4 riyals, while the offering price was 10 riyals per unit for all funds.
Consequently, the market value of the ”Riyadh REIT“ has now risen to 621 million riyals, an increase of 121 million riyals over its par value (500 million riyals), and the market value of the ”Al-Jazirah Mawtan REIT“ has risen to 264 million riyals, an increase of 146 million riyals over its par value (118 million riyals). Similarly, the market value of the ”Jadwa Al-Haramain REIT“ has now risen to 846 million riyals, an increase of 186 million riyals over its par value (660 million riyals), and the market value of the ”Taaleem REIT“ has risen to approximately 439 million riyals, an increase of nearly 154 million riyals over its par value (285 million riyals). Last January, the Saudi Capital Market Authority approved the registration and listing of the ”Al-Jazirah Mawtan REIT” on the market within the traded real estate funds sector under the ticker symbol 4331, with a daily price fluctuation limit of 10 percent for the unit price.
The market capitalization of publicly traded real estate funds is likely to rise to approximately 2.85 billion riyals following today’s listing of Al-Ma’athar REIT, assuming it rises by the maximum allowed 10 percent on its first day of trading.
Real estate investment trusts are enjoying great popularity in the market, as they allow small investors to invest in the real estate sector with modest capital, similar to investing in stocks. The Capital Market Authority has approved the launch of seven funds to date, since trading in them was permitted in January 2016.
