Taleem REIT acquires educational property for SAR 92 mln

Taleem REIT Fund completed on June 29 the acquisition and ownership transfer of an educational building, which is currently leased by Al-Ghad National Schools located in Riyadh, the fund manager, Saudi Fransi Capital, said in a bourse statement.

Al-Ghad National Schools is wholly-owned and operated by Tadawul-listed National Company for Learning and Education.

The asset was acquired for SAR 92 million, and financed by the fund’s existing financing facility with Banque Saudi Fransi.

It is located in King Abdullah District on a total land area of 11.280 square meters and a total built-up area of 17,910 square meters.

The property is leased to Al-Ghad Schools under a ten-year binding lease agreement starting July 1, 2020, with annual rent of SAR 5.95 million.

The rent will be increased by 10% in the fifth year, followed by a 10% increment every five years (including the renewal periods).

The lease is automatically renewed for additional three five-year periods (with a total lease period of 25 years). If the tenant decides not to renew the lease, a five-year advance notice shall be sent to the lessor.

Taleem Fund will incur the brokerage fees for this acquisition.

The Lease is secured by promissory notes and corporate guarantees.

A positive financial impact is expected to show in H2 2020, Saudi Fransi Capital added.