Musharaka REIT completes acquisition of Gardino Hotel in Riyadh for SAR 85.5 mln

Logo of Musharaka REIT

Musharaka Capital, the fund manager of Musharaka REIT Fund, announced that it completed the legal and regulatory procedures concerning the acquisition of Gardino Hotel, located on Takhassusi Street, Olaya district, Riyadh, according to a bourse filing.

The acquisition was made for SAR 85.5 million, totally financed by Sharia-compliant credit facility, the statement said, adding that the title-deed was successfully transferred to Musharaka REIT.

The fund signed an annex to the lease agreement with Maskan Al Salam Company for Commercial Development and Investment as a tenant, to transfer all rights and obligations related to the agreement from the previous owner to the current owner (the fund).

The lease agreement will extend for 10 years, starting from Nov. 1, 2021 to Oct. 31, 2031, with an average annual revenue of SAR 7.78 million.

The first rent installment of SAR 7 million was already received by the fund in advance.

The lease agreement is irrevocable for the entire 10 years and the rent installments are guaranteed by promissory notes.

The fund manager emphasizes that the transaction would have positive impact on Musharaka REIT’s results and will help enhance the fund’s income and reduce any future volatility in the revenue stream.

In addition, the property’s long-term tenancy will help in generating sustainable future cash flow for unit holders.

In July, Musharaka REIT announced its plans to acquire a new, fully-furnished, four-star hotel in Riyadh at a total cost of SAR 85.5 million.

The acquisition price was decided after obtaining fair valuation reports from two independent real estate evaluators and after completing the technical and legal due diligence, Argaam earlier reported.

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