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Subscription to Alistithmar AREIC Diversified REIT’s 18.5M units starts today
Logo of Alistithmar AREIC Diversified REIT Fund
Institutional qualified investors will start today, May 12, subscription to units of Alistithmar AREIC Diversified REIT Fund, which will be listed on the Saudi Exchange (Tadawul). A total of 60.5 million units of Alistithmar AREIC Diversified REIT Fund will be offered at SAR 10/unit.
The fund seeks to raise SAR 1.21 billion through:
- Offering 42 million units, or 69.42% of the offered units to Almutlaq Real Estate Investment Co. (AREIC), in return for a portion of the value of the real estate assets’ acquisition and the in-kind consideration of SAR 420 million.
- Offering 18.5 million units, or 30.58% of total offered units, at SAR 185 million, to the public.
- Securing a credit facility of SAR 605 million.
The subscription period will run for seven days, extendable additional 10 days, until May 20, 2024.
In February, Alistithmar AREIC Diversified REIT Fund obtained the Capital Market Authority’s (CMA) approval on floating its units on the Saudi market as a real estate investment traded fund (REIT).
Qualified investors are:
- The First Tranche: Institutional investors such as companies, investment funds and commercial entities, and to whom 80% of the offered units will be allocated.
- The Second Tranche: Retail investors, to whom a maximum of 20% of the offered units will be allocated.
In the event that retail investors do not fully subscribe to their offered units, the remaining offered units will be added to the institutional tranche.
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Key Information |
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Targeted Size |
SAR 1.21 bln |
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In-kind Subscription |
SAR 420 mln |
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Value of Financing |
SAR 605 mln |
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Cash Subscription |
SAR 185 mln |
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Number of Units |
60.5 mln |
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Number of Offered Units |
18.5 mln |
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Price/Unit |
SAR 10 |
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Percentage of Offering |
30.58% |
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Percentage of Target Size |
15.30% |
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Minimum Subscription |
100 units at SAR 1,000 minimum, plus subscription fees and VAT |
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Maximum Subscription |
6.05 million units at SAR 60.5 million |
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Market |
Main Market - TASI |
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Offering Period |
Seven days – can be extended for additional 10 days- until May 20, 2024. |
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Subscription Fees |
2% of net subscriptions |
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Final Allocation and Refunds |
15 business days from end of offering |
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Qualified Investors |
Institutional Investors |
The fund seeks to invest in developed real estate assets at a minimum of 75% of the total asset value, targeting a rental income locally, in addition to distributing at least 90% of net earnings, excluding capital gains.
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Key Information |
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Fund |
Alistithmar AREIC Diversified REIT Fund |
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Type of Fund |
A closed-ended public Sharia-compliant real estate investment traded fund. |
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Fund Currency |
Saudi Riyal |
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Investment Objectives |
Investing in real estate assets in or outside Saudi Arabia, eligible to generate regular rental income; distributing at least 90% of the fund’s annual net profit on a semi-annual basis. The fund may occasionally invest its assets in the real estate development projects, provided that: The fund assets invested in the real estate developments, and which generate regular income, should not be less than 75% of the fund’s total assets, as per the latest audited financial statements.
The fund should not invest in white land plots. |
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Distribution Policy |
Profits will be distributed to unitholders at a rate of no less than 90% of the fund’s net profit at least twice a year on a semi-annual basis, in September and March, excluding capital gains resulting from the sale of real estate assets or their expropriation, the cash flows of which will be reinvested, subject to the board decision and aligning with the investment objectives of the fund and in the best interests of the unitholders. |
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Fund Management Fees |
Annual fees equal to 0.5% of the fund’s total asset value, calculated and paid on a semi-annual basis. |
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Trading Fees |
The fund manager receives a 0.5% of the selling price for each real estate asset sold by the fund. Additionally, the fund manager also receives a 0.5% of the purchase price for each real estate asset purchased by the fund, in return for the fund manager's undertaking the necessary due diligence as well as the negotiations on purchase or sale terms, and completion of the transaction. Fees are payable upon completion of the purchase or sale transaction for each real estate asset, with the fees applicable to the initial purchase of real estate assets, calculated based on the acquisition price of the initial real estate assets. |
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Performance Fees |
In the event that the fund is able to pay annual cash distributions exceeding 10% of the net asset value of the fund, an incentive fee will be paid from the fund's assets to the fund manager, amounting to 20% of any amount exceeding 10% of the net asset value of the fund. |
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Special Information |
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Fund Manager |
Alistithmar Capital |
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Custodian |
Alinma Investment Co. |
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Receiving Banks |
Alistithmar Capital, The Saudi Investment Bank, Saudi National Bank
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The fund’s investment fields include:
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Investment Fields |
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Field |
Minimum of Fund Total Asset Value |
Maximum of Fund Total Asset Value |
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Net Lease Assets |
75% |
100% |
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Real Estate Development |
-- |
25% |
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Foreign Properties (outside Saudi Arabia) |
-- |
25% |
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Properties Renovation |
-- |
25% |
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Property Re-Purchase Agreements |
-- |
25% |
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Licensed Money-Market Funds |
-- |
25% |
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Income-Generating Licensed Investment Funds |
-- |
25% |
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Usufruct Rights |
-- |
25% |
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Debt Instruments |
-- |
25% |
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Treasuries |
-- |
10% |
The fund targets to initially invest in seven properties in Riyadh, Al Khobar, Dammam, Jubail Industrial City and Abha. These properties come under four segments, Commercial, Office, Hotel and Logistics/Warehouses.
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Real Estate Properties |
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Property |
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Segment |
City |
Acquisition Value (SAR mln) |
|
|
Galleria Mall |
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Commercial |
Jubail Industrial City |
269.7 |
|
|
Citadines Abha |
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Hotel |
Abha |
247.8 |
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|
Somerset Downtown Al Khobar |
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Hotel |
Al Khobar |
236.5 |
|
|
The Roof |
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Commercial |
Riyadh |
226.3 |
|
|
Corniche Plaza |
|
Commercial/ Office |
Dammam |
110.1 |
|
|
Al Mashael Warehouses |
|
Logistics/Warehouses |
Riyadh |
34.1 |
|
|
Saudi Ericsson |
|
Office |
Riyadh |
16.2 |
|
|
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Total |
1140.7 |
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Target net returns reach nearly SAR 93.88 million for 2024 and approximately SAR 93.3 million for 2025:
|
Target Returns/ Net Rents (SAR mln) |
|||
|
Property |
2024 |
2025 |
2026 |
|
Galleria Mall |
27.93 |
27.35 |
27.35 |
|
Citadines Abha |
20.50 |
20.50 |
20.50 |
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Somerset Downtown Al Khobar |
17.54 |
17.63 |
17.81 |
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The Roof |
16.96 |
17.01 |
17.14 |
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Corniche Plaza |
7.18 |
7.02 |
7.05 |
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Al Mashael Warehouses |
2.48 |
2.45 |
2.45 |
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Saudi Ericsson |
1.29 |
1.32 |
1.32 |
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Total |
93.88 |
93.28 |
93.62 |
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