MEFIC REIT’s IPO begins today

MEFIC REIT’s initial public offering (IPO) will start today, April 4, on the Saudi Stock Exchange (Tadawul) and run for 20 working days until May 1.

Subscription will be available through the websites of Al Rajhi Bank, National Commercial Bank (NCB), Riyad Capital, Banque Saudi Fransi, Aljazira Capital and MEFIC Capital. The minimum subscription is SAR 500.

The fund size amounts to SAR 1.23 billion. MEFIC will offer 87.95 million units at SAR 10 per unit, accounting for 71.5 percent of the fund’s total units, to raise SAR 879.50 million.

MEFIC REIT intends to provide a minimum threshold return of 5 percent. It also targets a return of 7.5 percent this year and expects it to reach 7.9 percent in 2021.

In case the minimum return declines below 5 percent, MEFIC Capital, the fund manager, is committed to pay at its own expense a maximum of 2 percent to subscribers, so as to boost the return to 5 percent for a period of eight years.

MEFIC REIT’s portfolio is composed of six out of eight properties, to be leased through binding contracts to each tenant for four years, which will reduce the operational and collection risks. 

Eligible investors are Saudis, as well as institutions, companies, and investment funds owned by Saudis and are operating in the Kingdom.