Al Rajhi Financial Company issued a supplementary announcement regarding an announcement related to a material development in Al Rajhi REIT Fund.
Al Rajhi Financial said that the change comes as a follow-up to Al Rajhi Financial’s announcement published on 07-05-1442 AH corresponding to 22-12-2020 AD, where Al Rajhi Financial would like to clarify that after negotiations and court sessions, the company, in its capacity as manager of Al Rajhi REIT Fund, commissioned a specialized law firm to litigate against Al Fawzan Trading and Contracting Company in its demand to balance the lease contracts for the Al Narjis, Al Anwar and Rama Plaza properties as a result of its failure to benefit from the leased property, according to its claim.
After referring the cases to amicable settlement, the Fund Manager appointed a specialist expert who confirmed the tenant's loss of benefit from the Rama Plaza property as a result of the Riyadh Metro works on it. The Fund's Board of Directors saw that, in order to avoid the potential retroactive effects of the claims and to achieve the interest in the short and long term in defense of the rights of the unit owners, the Board of Directors agreed to settle the case amicably.
The reconciliation was documented at the General Court in Riyadh on 13/03/1443 AH, corresponding to 19/10/2021 AD.
The most prominent points included in the agreement with Al-Fawzan Trading and Contracting Company are as follows:
1- Termination of the lease agreement for the Rama Plaza property on 1/7/1442 AH.
2- Termination of the lease agreement for Al Anwar Plaza property on 1/1/1443 AH with the tenant paying a termination penalty of 4,633,200 Saudi Riyals.
3- The lease agreement for the Narges Plaza property will continue with the same terms and conditions.
4- The tenant pays the net dues amounting to 29,408,010 Saudi Riyals by paying an initial installment of 15 million Saudi Riyals and scheduling the remaining dues in four installments due quarterly.
5- Resolving the disputes in each of the properties of Al Narjis Plaza, Anwar Plaza and Rama Plaza.
It is worth mentioning that the current status of Rama Plaza property is as follows: Occupancy rates 61% Rental revenues 2,657,344 Saudi Riyals (Note: The metro works located opposite the property, which included the closure of roads leading to the property, affected the decrease in rental revenues and occupancy rates).
The current status of Al Anwar Plaza property is as follows: Occupancy rates 43.6%, rental returns 1,207,400 Saudi Riyals. It should be noted that Al Anwar and Rama properties are located in prime commercial locations, and therefore the Fund's management will work on a plan to improve the properties, knowing that it is currently leading negotiations with tenants to increase the occupancy rate in Al Anwar and Rama Plaza properties to improve occupancy rates and rental returns.
Important statement from Al Rajhi REIT regarding Al Narjis, Al Anwar and Rama Plaza properties in Riyadh
