Mulkia REIT acquires new mixed-use property in Riyadh for SAR 335 mln

Logo of Mulkia Gulf Real Estate REIT Fund

Mulkia Investment Co., the fund manager and operator of Mulkia Gulf Real Estate REIT Fund, announced signing an agreement to acquire Al Jadah mixed-use development in Riyadh.

The property was acquired for SAR 335 million, excluding tax and brokerage commission fees, the fund manager said in a bourse filing.

The acquisition process will take place in two phases. Phase one will be against a cash payment through the fund’s available financing to acquire 63.61% of the property.

The remaining percentage will be purchased in the second phase through the fund’s capital increase through in-kind units worth SAR 35 million issued to the property owners. The remaining amount will be generated via public offering after obtaining the required approvals as per the regulatory requirements.

The hotel and the villas are being operated by Radisson Blu, an international operator, as per the signed operation agreement for 15 years, with a total built-up area of 33,000 square meters and a land area of 21,671 square meters.

The property’s annual income at 100% occupancy of the commercial units and the usual rate of hotels occupancy is expected to be SAR 26.3 million due to its recent operation. The current occupancy rate for the commercial units and offices is 60%, while the hotel’s soft opening was in June 2021.

The fund manager expects a positive effect of the acquisition as this will increase in the diversification of funds’ activities as well as geographic allocation, particularly, increasing the weight of the funds’ properties in Riyadh.

The property is near King Khaled Airport, Roshan project, SAR train station, universities, and other major attraction hubs.

The mixed-use development is expected to positively impact the fund’s revenue, the statement noted.

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