MEFIC REIT terminates leasing contract with Tihama for Jeddah tower

MEFIC Capital, the fund manager of MEFIC REIT Fund, terminated the lease contract with Tihama Advertising & Public Relations Co. (Tihama) for the fund’s administrative tower in Al Hamra district in Jeddah.

The company said in a statement to Tadawul on Wednesday that the move aims to generate maximum rental income from the fund’s properties to boost its revenue and dividends.

The contract termination generated a SAR 1.7 million profit for the fund, the statement said, adding the tower will be operated by a new property management company, who will deal with the existing tenants and lease vacant units, to enhance cash flow.

The rents generated in the short term will be less than previous contact, but the contract termination gains will offset the decline.

Leasing income will return to previous levels once things return to normal, the fund manager said.