Jadwa Investment announces secondary offering for Saudi REIT Fund
Jadwa Investment, a leading investment management and investment advisory in the Middle East and the largest manager of REITs in Saudi Arabia, has started Sunday the secondary offering of its Jadwa REIT Saudi Fund. The proceeds from the secondary capital raise will be used mainly to acquire The Boulevard Riyadh, a luxury retail and office complex in the north of Riyadh.
Jadwa REIT Saudi Fund is a closed-end, Shariah-compliant, real estate investment traded fund with a term of 99 years and a total gross assets value of SR2.19 billion. The aim of the fund is to offer investors a stable and continuous source of income through periodic dividend distributions, by investing in top-tier real estate assets across major cities in Saudi Arabia. Since its listing, the fund’s distributions have grown steadily over the past 14 quarters, reaching a cumulative amount of SR2.49 per unit.
The secondary offering will raise additional equity of SR370 million. As a result, Jadwa REIT Saudi Fund will increase by 16.9% to reach SR2.56 billion. The Boulevard Riyadh will become one of the fund’s flagship properties at a purchase price of SR320 million, representing 13.4% of the fund’s assets post equity raise. The asset is expected to generate a net rental income of SR29.6 million per year, which translates to a net asset yield of 9.2%, an especially attractive yield considering The Boulevard Riyadh’s premium positioning.
Tariq Al-Sudairy, managing director and CEO of Jadwa Investment, said: “The announcement of the secondary offering of our Jadwa Saudi REIT Fund cements our leadership position as a real estate investor and REIT manager. We are pleased to offer our existing and potential clients the opportunity to invest in Jadwa REIT Saudi at an attractive price and to gain exposure to prime real estate assets across Saudi Arabia.”
The Boulevard Riyadh is a well-diversified property and presents an attractive investment opportunity, as it consists of office space, food and beverage focused retail space, a hotel, and a gym.
The Boulevard has various high-quality tenants with relatively long-term tenancy agreements. Considered a hotspot for people living in and visiting Riyadh, the attractive purchase price of the property poses a distinctive prospect for investors as compared to third-party valuations.
According to the fund’s terms and conditions, the value of the investment and any other income generated can either increase or decrease, intended and expected results are not guaranteed, and past performance does not guarantee future results.All investors wishing to make an investment must reach their decision in consultation with their financial and legal advisors and assess all risks involved in the investment.
An investor's investment in the fund will constitute an acknowledgment of having been informed of and accepting the terms and conditions of the fund. A copy of the fund’s full terms and conditions can be obtained from the website of the fund manager (www.jadwa.com) or from the websites of the receiving banks, Banque Saudi Fransi and Riyad Bank.