Al-Rajhi REIT completed its initial public offering (IPO) for 1.620 billion riyals, of which approximately 427 million riyals were offered to the public as part of the initial public offering (42.7 million units with a par value of 10 riyals per unit) during the period from January 1 to January 14, 2018.
In this regard, Al Rajhi Financial Company stated that the number of individual and institutional subscribers reached 90,561, setting a record among all initial public offerings of publicly traded real estate investment funds, and the funds raised in the initial offering amounted to 740 million Saudi riyals, representing a subscription ratio of 1,741 to 1 for the units offered.
Al-Rajhi REIT is considered the largest publicly traded real estate investment fund launched in the Kingdom to date. According to the fund’s terms and conditions, all subscribed units will be allocated to each investor, with a minimum of 100 units, with the remaining units allocated on a pro-rata basis at a ratio of 52% for each subscription request exceeding the minimum. Excess funds from subscription requests will be refunded within five business days from the closing date of the offering.
Gaurav Shah, CEO of Al Rajhi Capital, said: “We are pleased to announce the successful closing of the initial public offering of Al Rajhi REIT with a record number of subscribers. This significant milestone in the company’s development supports our goal of expanding our retail investor base and achieving greater public participation in more investment products, such as real estate investment trusts (REITs).Furthermore, investors” enthusiasm for subscribing to Al Rajhi REIT confirms that our strategy of making substantial investments in real estate has been well-received by our investors, and we will continue to focus on real estate assets with stable, long-term leases held by financially sound tenants in attractive sectors in order to achieve predictable returns in the coming years.”
The fund aims to invest in developed real estate properties capable of generating recurring rental income, and the proceeds from the public offering will be used to acquire new assets to expand the investment portfolio; It is also worth noting that Al Rajhi Capital owns approximately 10% of Al Rajhi REIT following the IPO, and the company has committed not to sell any units for two consecutive years after listing.
