Musharaka REIT starts procedure for acquiring a new property in Dubai worth SAR 47 mln

Musharaka Capital, fund manager of Musharaka REIT Fund, announced the start of the acquisition process of a new property in Dubai (UAE) at a total value of AED 46 million (SAR 47 million), after been assessed by two independent and accredited valuers.

The fund manager said in a bourse statement on Sunday that the target property is one of the largest self-storage facilities in the Middle East, and is a fully equipped building for the purposes of self-storage services with international standards.

The property is located in a strategic area in Dubai’s Jebel Ali First District overlooking Sheikh Zayed Road.

The property will be re-rented to the current tenant, The Box Self Storage Services Company, and the rent agreement will extend for 25 years, extendable for an additional 5 years.

The rent value will be set at AED 4 million (SAR 4.09 million), and will be increased by 10% every 5 years.

The fund manager further noted that the purpose of the lease contract is to use the property for self-storage services activity, adding that the acquisition is funded through existing Shariah-compliant bank facilities.

The financial impact of the acquisition will appear on the fund’s revenue and will reduce the risk of lower rental income.

The long tenure of the lease contract will have a positive impact on increasing annual cash savings for the fund, the fund manager added.

The related regulatory and legal procedures for the transfer of property ownership are expected to be finalized in 90 days, the statement added.

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