Alkhabeer REIT Fund terminates lease contract for Gallery Mall in Tabuk

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Alkhabeer REIT Fund decided to terminate the lease contract signed with the main tenant, Suliman Al-Qadeebi Sons Contracting Co. that leases 100% of Gallery Mall in Tabuk, Alkhabeer Capital, the fund manager, said in a bourse filing.

The decision came to preserve the rights of unitholders, and achieve a higher level of collectable rent income through assigning this asset to new operators that aim to raise its operational efficiency; thus, maximizing the collected rental income.

The fund manager is currently studying proposals for managing, operating and leasing the real estate asset, which will be announced after taking the necessary approvals to ensure the greatest possible guarantee for collecting rental income from the asset, which would enhance the fund's income and cash distributions.

The related financial impact is expected to be negative in the short term, due to the decrease in rental returns compared to the previous contract.

Nevertheless, Alkhabeer Capital expects that this development will have a positive impact on the fund in the medium and long term.