Al Rajhi Financial Services issued an additional announcement regarding an announcement related to a fundamental development in the Al Rajhi REIT fund.
Al Rajhi Financial said that the change comes in connection with the announcement of Al Rajhi Financial Company published on 07-05-1442 H, corresponding to 22-12-2020. Al Rajhi Financial Company would like to clarify that after negotiations and judicial hearings, the company, as the manager of the Al Rajhi REIT fund, commissioned a specialized law firm to file a lawsuit against Al Fawzan Trading and Contracting Company in its claim regarding the lease contracts for the properties of Narjis, Anwar, and Rama Plaza, due to its failure to benefit from the leased land as claimed by it.
After the cases were referred to arbitration, the fund manager appointed an expert who confirmed that the tenant had no benefit from Rama Plaza due to the Riyadh Metro project. The fund\u2019s board, in order to avoid the potential retroactive effects of the claims and to safeguard its interests in the short and long term, in defense of the rights of the unit owners, agreed to settle the case through arbitration.
The settlement was documented by the General Court in Riyadh on 13\/03\/1443 H, corresponding to 19\/10\/2021 AD.
Among the most important items agreed upon with the Fawazan Trading and Contracting Company are the following:
1- Termination of the lease agreement for the Rama Plaza property dated 1\/7\/1442H.
2- Termination of the lease agreement for the Anwar Plaza property dated 1\/1\/1443 H, with the tenant paying a termination fee of SAR 4,633,200.
3- The lease of the Narcissus Plaza property will continue with the same terms and conditions.
4- The tenant shall pay the net receivables amounting to SAR 29,408,010 by paying an initial payment of SAR 15 million and the remaining receivables shall be rescheduled into four installments that are paid quarterly.
5- Resolving the dispute cases in both Narjis Plaza, Anwar Plaza and Rama Plaza properties.
It is worth noting that the current situation for Rama Plaza is as follows: Occupancy rate 61%, Rental yield 2,657,344 Saudi Riyals (Note: The metro works located opposite the property, which included the closure of roads leading to the property, resulted in a decrease in rental yield and occupancy rate).
The current situation of the Anwar Plaza property is as follows: occupancy rate 43.6%; rental yield 1,207,400 Saudi riyals; it is worth noting that the Anwar and Rama properties are located in prime commercial locations, and therefore the fund management will work on a plan to improve the properties; it is worth noting that it is currently conducting negotiations with tenants to increase the occupancy rate of the Anwar and Rama Plaza properties in order to improve occupancy rates and rental yields.<\/p>","protected":false},"excerpt":{"rendered":"
Reading time: <\/span> 2<\/span> Minutes<\/span><\/span>Al-Rajhi Financial Company issued a follow-up announcement regarding a previous announcement concerning a material development related to the Al-Rajhi REIT. Al-Rajhi Financial stated that this update follows the announcement published by Al-Rajhi Financial on 07-05-1442 AH, corresponding to December 22,, 2020 AD. Al Rajhi Financial Company wishes to clarify that, following negotiations and court hearings, the company, in its capacity as manager of Al Rajhi REIT, has retained a law firm \u2026 Read 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