Al Nefaie – Umm Alqura REIT Fund’s initial public offering (IPO) started Jan. 16 and will run for 10 working days until Jan. 29.

 

The fund size amounts to SAR 692 million, and 34.95 million units were on offer at a subscription price of SAR 10 per unit. It floats SAR 349.5 million worth of assets, or 50.5 percent of the fund’s units.

 

The REIT seeks to generate a net return of 5.53 percent for the first three years of trading.

 

Al Nefaie said its asset base comprises four real estate assets located in Makkah. Assets include hotel towers and commercial centers.

 

Targeted Properties

Property

City

Sector

Land Area (m²)

Building Area (m²)

Rent duration (Hijri years)

Al Sabiq hotel Aziziyah 1

Mecca

Hotel

1,912.5

29,248.4

10*

A Mansour Hotel

Mecca

Hotel

2,309.3

27,455.4

10*

Al Saud Plaza

Mecca

Hotel

10,000.0

20,109.1

10*

Al Hedaya Hotel

Mecca

Hotel

420.0

4,720.8

*10

Total

 

 

14,641.8

81,533.6

10

*This duration includes three mandatory years, and seven optional.

 

The fund's assets will be evaluated on a semiannual basis by appraisers from Saudi Authority for Accredited Valuers (Taqeem). Initial valuation was conducted by Khadammati Office and White Cubes Co.

 

Tadawul started listing real estate investment traded funds (REITs) last year in a move aimed at enhancing transparency in the property sector and easing the Kingdom’s housing shortage. 

 

These funds allow investors to access the local real estate market through purchasing existing, developed property.  

 

Valuation of Targeted Properties (SAR mln)

 

Valuers

 

Property

White Cubes

Khadammati

Average valuations

Purchase price

Al Sabiq hotel Aziziyah 1

263.00

264.41

263.71

252.00

A Mansour Hotel

223.00

219.82

221.41

215.00

Al Saud Plaza

177.50

179.59

178.55

170.00

Al Hedaya Hotel

41.00

41.04

41.02

38.00

Total

704.50

704.87

704.68

675.00



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