Musharaka REIT signs binding agreement to buy Verdun Tower for SAR 235 mln

Logo of Musharaka REIT Fund 

Musharaka REIT Fund signed a binding agreement to acquire Verdun Tower in Riyadh for SAR 235 million, excluding the real estate transactions tax and brokerage commission, Musharaka Capital, the fund manager, said in a statement to Tadawul.  

The tower is distinguished by its prime location on Prince Mohammed bin Abdulaziz and King Fahd Streets intersection. The commercial, administrative building is leased to 33 tenants under various terms with 100% occupancy rate. The property delivers a net annual return of 7.4%.

The land area stands at 3,212 square meters (sqm) with a built-up area of 25,600 sqm. The leasable area reached 16,700 sqm, the fund manager added, noting that 59% of the property revenue is generated from four tenants (major companies) and its retail shops are guaranteed by five-year promissory notes.

Musharaka expects to complete the required administrative and legal procedures related to title deed transfer within 90 days from today, March 13. The acquisition will be financed through available Sharia-compliant bank facilities.

The deal is expected to have a positive financial impact on the fund starting from the third quarter of 2022. The fund’s portfolio will become more diversified geographically through investing in Riyadh. The acquisition will also help improve the fund’s revenue and save liquidity.