Al Mashaar REIT plans new acquisitions

Logo of Al Mashaar REIT Fund 

Al Mashaar REIT Fund is planning to acquire new properties as it earlier secured SAR 500 million facilities from Riyad Bank, the fund manager, SICO Capital, told Argaam. 

The current funding ratio accounts for 23% of the fund’s assets, SICO capital added. 

The company is open to investment in all vital sectors that witness steady growth, the fund manager affirmed, adding that the fund is keen on looking for unique real estate assets, which can provide a long-term, sustainable income to support capital growth. 

SICO Capital is seeking to increase the fund size, while preserving the interest of unit holders, not only through financing, but through issuing new units, whether in-kind or cash through fresh acquisitions. 

The fund manager added that the total value of lease agreements reached SAR 7.8 million in each of 2020 and 2021 for the assets located in Makkah. Annual rents were reduced by 80% for tenants due to the COVID-19 pandemic and its significant impact on the property market in Makkah and Madinah.

Despite these challenges, the fund distributed a 1% cash dividend for 2020, and fully waived its administrative fees during that period, in order to achieve its objectives in an optimal manner without incurring more losses during the COVID-19 crises, SICO Capital added.

The fund’s properties in Makkah are likely to deliver better performance in the coming period, SICO Capital noted, adding that investment in Makkah and Madinah will have a positive impact on the fund in the medium and long term.

On the other hand, Al Mashaar REIT modified its strategy to focus on assets that generate a minimum income of 55% of the fund’s total asset value in Makkah and Madinah and of 45% maximum across the remaining cities of the Kingom. This in turn enabled the fund to add SAR 10.5 million worth of annual lease agreements this year, after buying iOffices last March.

Al Mashaar REIT reported a net profit of SAR 0.4 million (SAR 0.05/unit) in Q3 2021, against a net loss of SAR 2.04 million a year earlier, Argaam reported.