Al Rajhi Financial Company issued a follow-up announcement regarding an announcement related to a material development in Al Rajhi REIT.

“Al Rajhi Financial” said The change comes as a follow-up to the announcement of Al Rajhi Financial Company published on 07-05-1442 AH corresponding to 22-12-2020 AD, where Al Rajhi Financial Company would like to clarify that after negotiations and judicial sessions, the company as the manager of Al Rajhi REIT Fund assigned a specialized law firm to plead against Al Fozan Trading and Contracting Company in his claim to balance the lease contracts for the properties of Al Narges, Al Anwar and Rama Plaza as a result of his non-use of the leased property as claimed by him.

After referring the cases for conciliation, the Fund Manager appointed a specialized expert who confirmed the lack of benefit of the tenant from the Rama Plaza property as a result of the Riyadh Metro works on it, the Board of Directors of the Fund saw that in order to avoid the consequences of the potential retroactive effect of the claims and to achieve the short and long term interest in defense of the rights of unit owners, the Board of Directors agreed to settle the case by reconciliation.

The reconciliation was documented at the General Court in Riyadh on 13/03/1443 AH corresponding to 19/10/2021 AD.

The most prominent provisions of the agreement with Al Fouzan Trading and Contracting Company include the following:
1- Termination of the lease agreement for the Rama Plaza property dated 1/7/1442 AH.
2- Termination of the lease agreement for the Anwar Plaza property on 1/1/1443H with the tenant paying a termination penalty of SAR 4,633,200.
3- Continuation of the Narges Plaza lease contract with the same terms of the contracts.
4- Paying the tenant the net dues amounting to SAR 29,408,010 by making a first payment of SAR 15 million and scheduling the rest of the dues in four installments due quarterly.
5- Finalizing the dispute issues in each of the Narges Plaza, Anwar Plaza and Rama Plaza properties.

It is worth mentioning that the current status of the Rama Plaza property is as follows: Occupancy 61% Rental revenue SAR 2,657,344 (Note: Metro works in front of the property, including road closures, have impacted rental yields and occupancy rates.)

The current status of Al Anwar Plaza is as follows: Occupancy Rate 43.6% Rental Yield 1,207,400 SAR It should be noted that Al Anwar and Rama are located in prime commercial locations and therefore the fund management will work on a plan to improve the properties, knowing that it is currently leading negotiations with tenants to increase the occupancy rate at Al Anwar and Rama Plaza to improve occupancy rates and rental yields.

The current status of Al Anwar Plaza is as follows