SHUAA Capital Saudi Arabia (SCSA) Presents
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SHUAA Capital Saudi Arabia (SCSA)
Presents
Disclaimer: This document has been translated on a best effort basis and the Arabic version of this document shall be deemed the official and formal version
for all purposes. In case of disparity, the Arabic version shall prevail.
Page | 1
Terms & Conditions
SHUAA REIT FUND
(A closed-end Shariyah-compliant real estate investment fund listed on the Capital Market Authority of Saudi Arabia)
Shariyah Approval No.: SLA-879-01-01-05-18
Fund Manager
SHUAA Capital Saudi Arabia (SCSA) is a closed joint stock company incorporated under the Saudi Companies Law, registered under
Commercial Registration No. 1010243538 and is licensed by the Saudi Arabian Capital Market Authority as an authorized person
under License No. 07056-37, in accordance with the list of authorized persons issued by the Capital Market Authority (“CMA”).
Custodian
Fund Size: 591,500,000 (Saudi Riyals)
Unites Offered to Public: 59,150,000 units
Unit price: SR 10 (Ten Saudi Riyals)
Amount Offered to Public (cash): 305,150,000 (Saudi Riyals)
In Kind Contribution: 286,350,000 (Saudi Riyals)
Total offering amount: 591,500,000 (Saudi Riyals)
Percentage of Unites Offered to Public from Fund Size: 51.59%
The Capital Market Authority assumes no responsibility for the contents of these terms and conditions and does not make any
representations as to the validity or completeness of these Terms and Conditions. The CMA shall not be liable for any financial loss
arising from the application of any provision of these Terms and Conditions or due to reliance thereon. Those wishing to subscribe in
the Fund units offered under this document, should investigate the validity of the information provided regarding the offered units. In
case the contents of this document are not understood, they must seek advice from an authorized financial advisor.
The Fund Manager shall be liable for the information contained in these Terms and Conditions and shall confirm, to the best of his
knowledge (after making reasonable effort to ensure the same), that they do not include any false or misleading statements and do
not omit any matters that should be included therein. The Saudi Arabian Capital Market Authority and Saudi Stock Exchange (Tadawul)
shall not be liable for the content of these Terms and Conditions and make no representations or warranties as to their accuracy or
completeness; and expressly disclaim any loss that may arise due to the approval which would void any part of these Terms and
Conditions.
Potential investors should undertake the necessary research to verify the investment opportunities offered under this document and
seek the help of a special advisor in matters of zakat and tax in respect of any zakat or taxes they may incur as a result of owning units
in the Fund, or trading units, or dispose them in any other form. Potential investors should not consider the views and estimates
provided by the Fund Manager in these Terms and Conditions as recommendations for investment in the Fund.
SHUAA REIT Fund has been approved as a Sharia-compliant investment fund permitted by the Fund's Shariyah Committee.
All investors should carefully read and review all documents and instruments related to the Fund prior to take a decision to invest.
Investor's investment in the Fund shall be deemed as an acknowledgment to having read and accepted the Fund’s Terms and
Conditions.
Omar bin Mohammed Saeb Al Jaroudi Lina Ismail Assaf
Chief Executive Officer Head of Compliance, AML& Terrorism Financing
Approved from Capital Market Authority on 25/02/2019
Page | 2
TABLE OF CONTENTS
Important Notice 4
Fund Manual 6
Terms and Conditions 17
A- Fund Name& Type 17
B- Address of the head office of the Fund Manager& website 17
C- Fund Term 17
D- Investment Fund Objectives 17
E- Summary of Fund Strategies 18
F- Fund-related Risk Factors 35
G- Subscription 48
H- Trading of Fund Units 53
I- Fund Termination 54
J- Fees, Expenses & Commissions 55
K- Fund Assets 59
L- Fund Board of Directors 61
M- Fund Manager 64
N- Custodian 68
O- Properties Managers 69
P- Auditor 69
Q- Financial Statements 70
R- Conflict of Interest 70
S- Reporting to Unit holders 71
T- Meeting of Unit holders 73
U- Rights of Unit holders 74
V- Other Information on the Fund 75
W- Amendments to the Terms and Conditions 78
X- Fund Manager Acknowledgments 78
Y- Governing Law & Disputes Resolution 78
Annex (A) Fund Manager Acknowledgments 79
Annex (B) summary of Financial Disclosure 82
Annex (C) Shariah Standards 85
Annex (D) Form of Power of Attorney 87
Annex (E) Subscription Form 88
Annex (F) Letter of Acknowledgment 89
Annex (G) Subscription Mechanism and Requirements 90
Annex (H) Example of Calculating the Recurrent Fees 93
Page | 3Important notice
These terms and conditions comprise detailed information with respect to SHUAA REIT FUND ("Fund") and the process of units
offering in the Fund ("Units"). Upon subscription in these units, the Investor shall be treated as having made a subscription only
based on the information contained in these Terms and Conditions, copies of which are available on Shuaa Capital Saudi Arabia's
website ("Fund Manager") www.shuaacapital.com, or the website of the Capital Market Authority ("the Authority"),
www.cma.org.sa or the website of the Saudi Stock Exchange ("Tadawul") (www.tadawul.com.s).
Potential investors shall read the Fund’s Terms and Conditions carefully and in full before purchasing units in the fund, where
investment in the fund involves a number of risks, which may not be suitable for all investors. Furthermore, investors shall be
willing to bear all the risks and liabilities associated with any investment in the Fund which are set forth in paragraph (f) of these
Terms and Conditions. The Unit holders' purchase of any of the Fund units shall be deemed as an acknowledgment that they have
read and accepted these terms and conditions.
These terms and conditions prepared by the Fund Manager in accordance with the provisions of the Real Estate Investment Funds
Regulations issued by the Authority Board of Directors pursuant to the provisions of Resolution No. 1-193-2006 dated
19/06/1427H (corresponding to 15/07/2006) ("Real Estate Investment Funds Regulations") and by virtue of the provisions of
traded real estate investment funds promulgated by the decision No. 6-130-2016 dated 23/01/1438H corresponding to
24/10/2016G, and amended by decision No. 2-115-2018 dated 13/02/1440H corresponding to 22/10/2018G. ("Instructions of
Traded Real Estate Investment Funds").
These Terms and Conditions contain the information provided in compliance with the registration requirements and the
acceptance of the listing of units according to the listing rules in the Saudi Stock Exchange as well as to the Real Estate Investment
Funds Regulations and the instructions of the Traded Real Estate Investment Funds.
The Fund Manager and the Fund's Board of Directors shall be liable for the information contained in these Terms and Conditions
and shall confirm, to the best of their knowledge (after making reasonable effort to ensure the same), that they do not include
any false or misleading statements and do not omit any matters that should be included therein by virtue of the Investment Funds
Regulation on the date of issuance of these Terms and Conditions and on the date of the last update thereof. However, certain
information contained in these Terms and Conditions (in relation to the real estate sector) were obtained from external sources.
While the Fund Manager and the Fund's Board of Directors have no reason to believe that such information, in tangible terms, is
inaccurate
The Capital Market Authority assumes no responsibility for the contents of these terms and conditions and does not make any
representations as to the validity or completeness of these Terms and Conditions. The Authority shall not be liable for any financial
loss arising from the application of any provision of these Terms and Conditions or due to reliance thereon.
These terms and conditions shall not be regarded as a recommendation by the Fund Manager to subscribe in the Fund. As well as,
the information contained in these Terms and Conditions is of a general nature and was prepared without taking into account the
individual investment objectives, financial situation or investment needs of the persons intend to investment in units offered.
Therefore, prior to take any decision to invest in the Fund, all those who have access to these terms and conditions shall be
responsible for seeking an independent advice from a financial advisor licensed by the Capital Market Authority in connection
with the offering process and shall rely on his own study to determine the suitability of both the investment opportunity and the
information contained in these terms and conditions to the individual objectives, financial position and needs of the investor,
including the advantages and risks of investing in the Fund. Investment in the Fund may be appropriate for certain investors only
and potential investors should not rely on the decision of others whether to invest or not to invest in the Fund as a basis for
advancing the investment therein.
Page | 4Subscription in units is available only to the following categories: (A) natural persons of Saudi nationality or the nationality of a
member state of the Gulf Cooperation Council (GCC); (B) establishments, companies, investment funds and other legal entities
existing in the Kingdom of Saudi Arabia and other GCC States; (C) Foreigners resident in the Kingdom of Saudi Arabia; (D) eligible
foreign investors under the rules organizing the investment of eligible foreign financial institutions in securities issued by the
Authority's Board of Directors under the resolution No. 42 dated 15/07/1436H corresponding to 04/05/2015G; (E) Other investors
permitted by the Authority to possess securities listed on the Saudi Stock Exchange (Tadawul). All recipients of these Terms and
Conditions shall have access to any legal or regulatory restrictions relevant to the offering and sale of units, and shall observe such
restrictions.
The information contained in these Terms and Conditions shall remain subject to change. The value of units may be affected by
future developments, such as inflation, taxes, or any other economic, political or other factors that the Fund Manager has no
control over (for further details, see paragraph (f) of these Terms and Conditions). These terms and conditions or any verbal or
written information regarding the units offered are not intended and should not be construed or relied upon in any way as
guarantee or confirmation of future profits, results or events.
These terms and conditions were prepared based on the information available to the Fund Manager at this date. The validity of
this information may be affected by future operating conditions and therefore there are no assurances, representations or
warranties regarding the validity of such information after that date. In the event of any future changes, the unit holders will be
notified through the announcement on the Saudi Stock Exchange (Tadawul) and the website of the Fund Manager.
Some of the terms in these Terms and Conditions constitute or may be construed as constituting "future assumptions". These
assumptions can generally be determined by the use of words or phrases expressing the future such as "plans," "estimates,"
"believes," "expects," "predicts," "may," "will, "shall", "expected" or negative thereof or other variations in these terms or
comparable terms.
Such terms of future reflect current point of view of the Fund Manager regarding future events, however they do not constitute
a guarantee of future performance. There are many risk factors that may cause the results, performance or actual achievements
of the Fund to vary significantly from any future results. Some of these risks are described in detail in other sections of these terms
and conditions (for further details, please refer to paragraph (f) of these terms and conditions). If these risks or uncertainties are
realized or any fundamental assumptions have been proved to be incorrect or inaccurate, the actual results of the Fund may differ
significantly from those reported in these terms and conditions as expected, believed, estimated, planned or anticipated.
Page | 5Fund Manual
Fund manager SHUAA Capital Saudi Arabia (SCSA)
Hamad Tower, King Fahad Road, 27th Floor
P.O. Box 8181. Riyadh 11482, Saudi Arabia.
Tel.: +966114666990
Fax: +966114666993
scsa@shuaa.com
www.shuaacapital.com.sa
Custodian & IPO Al Bilad Capital
Agent Smart tower, 1st floor, Al Tahlia Road
P.O. Box 140, Riyadh 12313
Saudi Arabia
Administrator SHUAA Capital Saudi Arabia (SCSA)
Hamad Tower, King Fahad Road, 27th Floor
P.O. Box 8181. Riyadh 11482, Saudi Arabia.
Tel.: +966114666990
Fax: +966114666993
scsa@shuaa.com
www.shuaacapital.com.sa
Sub- APEX Fund Services (Dubai) Limited
administrator Office 101, 1st floor, Gate Village, Building No. 5
P.O. Box 506534, Dubai International Financial
Center, Dubai, UAE.
Tel.: +97144289221
Fax: +971551823406
www.apexfundservices.com
Receiving Bank Riyad Bank
King Abdulaziz street- Al Muraba' district, Riyadh
P.O. Box 22622, Riyadh 11416, Saudi Arabia
Tel.: 920002470
Fax : 0112915101
www.riyadbank.com
Receiving Bank Al Rajhi Bank
Olaya street, Riyadh 11411,Saudi Arabia
Tel.: +966114629929
Fax: +966114624311
contactcenter1@alrajhibank.sa
http://www.alrajhibank.com.sa
Page | 6Receiving Bank National Commercial Bank (NCB)
Al Maather Street- Al Muraba' district
Riyadh 12624, Saudi Arabia
Tel.: 920001000
Fax: 920007778
www.alahli.com
Auditors Crowe HorwathTM- Al Azem& Al Sudairy CPA's &
Consultants
Riyadh- headquarter
P.O. Box 10504, Riyadh 11443, Saudi Arabia
Tel.: +966112175000
Fax: +966112175000
ch@crowehorwath.com.sa
Legal Consultant The Law Office of Mohammed Al-Ammar
In affiliation with King & Spalding LLP
Kingdom center, 20th floor, King Fahd Road
P.O. Box 14702 Riyadh 11434, Saudi Arabia
Tel.: +966114669400
www.kslaw.com
Technical Advisor White Cubes Real Estate
Riyadh branch, Kingdom of Saudi Arabia
P.O. Box 2955, Riyadh 11461
Tel.: +966112542126
Mobile: +966506437765
mnt@white-cubes.com
Feasibility Study ValuStart Co.
prepared by Riyadh branch, Kingdom of Saudi Arabia
Tel. +966112935127
Riyadh@valuestrat.com
6th floor, southern tower, King Faisal Foundation
Al Faisaliah Compound, Riyadh, Saudi Arabia.
www.valustrat.com
Sharia advisor Shariyah Review Bureau
Building No. 872, Office No. 41 & 42
Road 3618, Al Saif 436
Bahrain
Tel.: +97317215898
www.shariyah.com
Page | 7Real Estate White Cubes Real Estate
Valuer1 Riyadh branch, Saudi Arabia
P.O. Box: Al Muraba', 2955, Riyadh 11461
Tel.: +966112542126
Mobile: +966506437765
mnt@white-cubes.com
Real Estate ValuStart Co.
Valuer2 Riyadh branch
6th floor, southern tower, King Faisal Foundation
Al Faisaliah Compound, Riyadh, Saudi Arabia.
Tel.: +966112935127
Riyadh@valuestrat.com
ww.valustrat.com
Governing Saudi Arabia Capital Market Authority
Authority Headquarter of Capital Market Authority
P.O. Box 87171, Riyadh 11642, Saudi Arabia
Tel.: 1111245800
info@cma.org.sa
www.cma.org.sa
Trading Platform Saudi Stock Exchange (Tadawul)
King Fahd Road- Olaya 6897, Unit No. 15
P.O. Box 112211, Riyadh 3388, Saudi Arabia
Tel.: +966112189999
Fax: +966112189133
www.tadawul.com.sa
Page | 8Definitions
SHUAA REIT FUND, a closed-end real estate investment fund compliant with Islamic
Shariyah rules, listed on the Saudi Arabian Capital Market Authority and operated by the
Fund
Fund Manager. This fund incorporated under the laws and regulations circulated by the
Capital Market Authority and hereby governed by the laws of the Kingdom of Saudi Arabia.
SHUAA Capital Saudi Arabia (SCSA) is a closed joint stock company registered under
Fund Manager Commercial Registration No. 1010243538 and is licensed by the Saudi Arabian Capital
Market Authority as an authorized person under License No. 07056-37.
Auditor Crowe HorwathTM- Al Azem& Al Sudairy CPA's& Consultants.
The regulations bears the same name issued by the Capital Market Authority under
Regulations of resolution No. 1-83-2005, dated 21/05/1426H, corresponding to 28/06/2005, as amended
Authorized Persons by the Capital Market Council Resolution No. 3-85-2017, dated 27/12/1438H,
corresponding to 18/09/2017, and according to its amendments issued from time to time.
Business Day Any business day on which the Saudi banks are open to exercise their operation.
A financial obligation paid by the individual to the state or to a local public body, as a
Tax or Taxes contribution to cover the public expenses, without having any special benefit in return for
paying the tax.
The date specified in the paragraph (G-6) of these Terms and Conditions, which is the date
Closing Date of the last day of the initial offering period. The closing date may be the last day of the
initial placement after the extension.
Authority or Capital
Capital Market Authority of the Kingdom of Saudi Arabia.
Market Authority
Custodian Al Bilad Capital.
The period from 1 January to 31 December of each year, except for the first year of Fund
Fiscal Year Incorporation for which financial year starts from the closing date and ends on 31
December 2018.
99 years from the date of listing and shall be renewable for a similar period at the sole
Fund Term
discretion of the Fund Manager following the approval of the CMA.
The amount equivalent to gross income resulting from the rental of the Fund's properties
Total Rental Income
before any deductions.
The price by which the units are offered during the Offering Period, which is SR10 (Ten
Offering Price
Saudi Riyals).
The period within which the units are offered in accordance with the Real Estate
Offering Period Investment Funds and Traded Real Estate Investment Funds related instructions, which is
10 business days, starting from 25/03/2019 and lasts until 07/04/2019.
The assets described in paragraph (e) (1) (2-1) of the Terms and Conditions to be acquired
Primary Assets by the Fund after the closing date in accordance with the terms of the relevant purchase
agreements.
Minimum amount to
SR 500
invest in the Fund
Page | 9Maximum amount to
SR 29,000,000
invest in the Fund
Net asset value per unit is calculated by subtracting the total liabilities of the Fund,
including any financial obligations, fees and expenses due to the Fund during the
Net Asset Value calculation period of the Fund's total assets. The output is divided by the number of units
of the Fund for the same period. The result is the indicative value of the outstanding units
of the Fund.
Initial Offering The initial public offering of units in accordance with these Terms of Conditions.
Ordinary Fund A decision requiring a positive vote of the Unit holders whose ownership exceeds 50% of
units in the Fund, whether present in person or by proxy in a meeting of Unit holders or
Resolution
by modern technological means.
Unit holder of the A unit holder who is not subject to any of the following: (A) any Unit holder possess 5% or
more of the units; and (B) the Fund Manager and its subsidiaries; (C) a member of the
Public
Fund's Board of Directors.
Real Estate Real Estate Investment Funds regulations issued by the Capital Market Authority under the
Investment Funds resolution No. 1-193-2006 dated 19/06/1427H corresponding to 15/07/2006 as amended
Regulations from time to time.
Traded Real Estate The Traded Real Estate Investment Funds related instructions issued by the Capital Market
Authority in accordance with its resolution No. 6-130-2016, dated 23/01/1438H,
Investment Funds
corresponding to 24/10/2016G; As amended by its resolution no. 2-115-2018, dated
related instructions
13/02/1440H, corresponding to 22/10/2018G.
Receiving Banks Any of following banks: Riyad Bank, Al Rajhi Bank or National Commercial Bank (NCB).
Means any of the following: (A) Fund Manager; (B) Custodian; (C) a developer appointed
by the Fund manager with respect to the Fund; (D) any valuation company hired by the
Fund to evaluate the Fund Assets; (E) the Fund's Auditor; (F) any of Unit holders possess
Related Parties
more than 5% of the Fund units; (G) any person or entity controls in any of the mentioned
parties or subordinate thereof; (H) any of the executive directors or any employees of the
mentioned parties.
Saudi Riyals The official currency of the Kingdom of Saudi Arabia
Means the following:
- Al Mutlaq Holding Company.
- Abdullah Ibrahim Al Khorayef Sons Co.
sellers - Khalid Bin Abdulaziz Bin Mohammed bin Nafjan.
- Abdulaziz Bin Ibrahim Bin Abdullah Al Ajlan.
- Wedad Bint Abdulaziz Bin Abdul Mohsen Al Twaijri.
Sharia Advisor Shariyah Review Bureau appointed as the Fund sharia advisor.
Sharia rules related to the Fund and approved by the sharia advisor, and upon which the
Sharia Rules
Fund specifies the investments authorities as stipulated in Annex (B).
Structurally Developed ready-to-use real estates that meet the regulatory requirements, including
Developed Real residential, commercial, industrial, agricultural, office, retail, logistics, hospitality,
Estates healthcare and education.
Special Purpose A limited liability company established by the Custodian to retain the ownership of the
Company Fund's assets.
Page | 10Subscription
The amount with which the unit holder subscribes upon subscription in the Fund.
Amount
Tadawul Saudi Stock Exchange.
Volume of Targeted
305,150,000 (Saudi Riyals).
Public Offering
(Cash)
Volume of Targeted
286,350,000 (Saudi Riyals).
Offering (In kind)
the Total Value of The total value of the assets of the Fund shall be the total market value of all real estate
the Assets of the assets, cash and dividends due from the Fund's investments, as well as all receivables and
Fund or the Total market value of all non-real estate investments in addition to the present value of any
Assets of the Fund other assets owned by the Fund.
Total Amount of the The combination of the targeted offering amount (In cash) and the targeted offering
Fund amount (In Kind).
A unit of the Fund by which its owner shall be granted a common right and a relative share
Unit
in the Fund Assets.
Unit holders The investor who invests in one or more units by possessing thereof.
Unit's Assets Net An indicative value per unit and is calculated by dividing the net asset value of the Fund by
Value the number of the Fund current units.
Unit Price The market price for single unit as published by Saudi Stock Exchange (Tadawul).
Idle Lands Each empty land, undeveloped land and is subject to the tax regulations of Idle Lands.
Valuation Day The day outlined in paragraph (K) (4) of these Terms and Conditions.
Short-term Investment in bank Murabaha, compliant with Shariah Board regulations with a period of
Murabaha less than one year.
Money Market Investment funds whose objective is to invest in bank Murabaha compliant with Shariah
Funds Board regulations with a period of less than one year.
The bonds issued by the shareholding companies, governmental and semi-governmental
Debt instruments entities or any other entity are entitled to issue any kind of debt instruments on condition
that they be in compliance with Shariah rules.
Pre-emption It is right to give priority to a particular person in the purchase over other buyers
It is the necessary care provided by the Fund Manager to ensure the validity and integrity
Due diligence
of all information relating to a specific asset, project or any of the operations and
Examination
transactions of the Fund.
Page | 11Fund Summary
SHUAA REIT FUND, a general traded closed-end real estate investment fund compliant
Name & type of with Islamic Shariyah rules, it was incorporated under the laws and regulation applicable
the Fund in the Kingdom of Saudi Arabia and governed by the Saudi Capital Market Authority and
in compliance with Listing Rules of the Saudi Stock Exchange ("Tadawul")
SHUAA Capital Saudi Arabia (SCSA) is a closed joint stock company registered under
Fund Manager Commercial Registration No. 1010243538 and is licensed by the Saudi Arabian Capital
Market Authority as a licensed person under License No. 07056-37;
The investment objective of the Fund is to invest in structurally developed real estates
and through which periodic and rental income can be achieved. 90% of the net profit of
Investment
the Fund is distributed to the unit holders in cash on a semi-annual basis at the end of
Objectives
December of each year during the Fund's period and the Fund Manager may increase
distribution times to be quarterly if possible
Investment in The Fund is entitled to invest in real estate outside the Kingdom with a value not
Real Estates exceeding 25% of the total value of the Fund's assets in accordance with the latest audited
outside KSA financial statements
Volume of
Targeted Public 305,150,000 Saudi Riyals
Offering (Cash)
Volume of
Targeted Offering 286,350,000 Saudi Riyals
(In kind)
Total offering 591,500,000 Saudi Riyals
amount
Unit Price 10 Saudi Riyals
Minimum
500 Saudi Riyals
Investment
Maximum
29,000,000 Saudi Riyals
Investment
Net targeted Yield
6.94%
of the Fund
Prohibition
Period on In kind A full year from the date of commencement of trading in the units of the Fund.
Contributions
Page | 12Subscription in units is available only to the following categories: (A) natural persons of
Saudi nationality or the nationality of a member state of the Gulf Cooperation Council
(GCC); (B) establishments, companies, investment funds and other legal entities existing
Investors Allowed in the Kingdom of Saudi Arabia and other GCC States; (C) Foreigners resident in the
to Invest in the Kingdom of Saudi Arabia; (D) eligible foreign investors under the rules organizing the
Fund investment of eligible foreign financial institutions in securities issued by the Authority's
Board of Directors under the resolution No. 42 dated 15/07/1436H corresponding to
04/05/2015G; (E) Other investors permitted by the Authority to possess securities listed
on the Saudi Stock Exchange (Tadawul).
The Fund Manager intends to utilize cash proceeds from subscription in the Fund for the
The use of
purpose of acquiring the initial assets and covering the costs of acquisition and
Proceeds
organization as described in paragraph B-6 of these Terms and Conditions.
Fund Currency Saudi Riyals
The period of the Fund shall be 99 years from the date of listing in Tadawul and shall be
Fund Period
renewable at the discretion of the Fund Manager following the approval of the CMA;
The Fund Manager is committed to distribute cash dividends on investors not less than
90% of the annual net profit of the Fund, except for profits resulting from the sale of real
estate assets and other investments, which can be reinvested in new assets as determined
by the Fund Manager to serve the interests of unit holders, provided that the decision
Dividend Policy
period shall not exceed 90 days from the date of sale of the asset. The dividends are
distributed on a semi-annual basis at the end of December and June of each year during
the Fund's period and the Fund Manager may increase distribution times to be quarterly
if possible.
On behalf of the Fund, the Fund Manager may obtain Shariah-compliant financing. The
Financing percentage of financing received shall not exceed 50% of the total value of the Fund's
assets according to the latest audited financial statements of the Fund.
Compliance with The Fund shall invest and implement its transactions and affairs in a manner consistent
Islamic Sharia with the Sharia rules adopted by the Sharia Advisor.
The net asset value of the Fund equivalent to the value of all assets less all the Fund's
Valuation &
liabilities on the relevant valuation day. The valuation of Fund assets shall be conducted
Times to be
twice a year (once every six months) by two independent Saudi valuers accredited by the
Performed
Saudi Authority for Accredited Valuers.
In order to consolidate the Fund Manager’s interests with the investors, management fees
were divided into two parts where the Fund shall pay the Fund Manager an annual
amount of 0.4% of the total value of the Fund's assets and an amount equivalent to 5% of
Management Fee the total rental income of the Fund on a semi-annual basis. Their total value will represent
0.8% of the total value of the Fund's assets according to the latest valuation of the Fund.
Value added tax and all other taxes applied in the future shall be excluded from the
amounts paid under Management Fees.
Each investor applying to be subscribed in the Fund shall pay the Fund Manager a
Subscription Fee percentage of 2% of the subscription amounts allocated to him. Such fees are payable
upon subscription in the Fund.
Page | 1360,000 Saudi Riyals shall be paid by the Fund to the Custodian as a one-time service fees.
The Fund also pays an annual amount of 0.025% of the total value of the Fund's assets.
Custody Fee
Such fees are payable quarterly. Value added tax and all other taxes applied in the future
shall be excluded from the amounts paid under Custodian Fees.
The Fund shall pay the Fund Manager from its assets an amount equivalent to 1.5% of the
Finance amount of the financing it receives and such fees shall be paid upon completion of any
Structuring Fee transaction to be entered into by the Fund. Value added tax and all other taxes applied in
the future shall be excluded from the amounts paid under Finance Structuring Fees.
Brokerage fees in amount of 2.5% of the acquired primary assets value shall be paid by
the Fund to the Fund Manager in order to be paid by the Fund Manager to the Real Estate
Brokers as per the contracts entered into therewith. In the event of the acquisition of
Brokerage Fee future real estate assets, the same percentage will be paid in case of real estate brokers.
Otherwise it will not be paid and there is no conflict of interests between the real estate
brokers with the relevant parties in the fund. Value added tax and all other taxes applied
in the future shall be excluded from the amounts paid under Brokerage Fees.
A fee of 1% of the purchase price of each asset acquired by the Fund and 2% of the sale
price of each of the Fund's assets shall be paid by the Fund to the Fund Manager in return
for the Fund Manager's conducting the necessary investigation, negotiation on the terms
Transactions Fee of sale and purchase and finalize the transaction. Such fees shall be payable after finalizing
the purchase or sale of each real estate and shall not be applied to the Fund's primary
assets. Value added tax and all other taxes applied in the future shall be excluded from
the amounts paid under Brokerage Fees.
The Fund pays an amount equivalent to US$ 4,000 (15,000 Saudi Riyals) to be paid once
as preparation fees, to be charged to the Fund Manager on behalf of the fund. The Fund
pays recurrent costs as follows: The Fund pays an amount equivalent to 2,550 US dollars
(9,563 Saudi Riyals) per month in return for service represented in calculating the net
Sub- asset value and the preparation of internal financial statements. The Fund also pays the
administrator Fee equivalent of US$ 9,500 (SR 35,625) per annum in return for its service represented in
preparing the Fund's financial statements. Thirteen months after the offering, the
amounts would be increased by 3.5% per annum as inflation allowance. Value added tax
and all other taxes applied in the future shall be excluded from the amounts paid under
Sub-administrator Fees.
35,000 Saudi Riyals shall be annually paid by the Fund to The Certified Public Accountant.
Certified Public All payments of the Certified Public Accountant's fees are calculated to include VAT,
Accountant's Fees withholding tax and all other taxes applied in the future.
A fixed fee of 7,500 SR per annum shall be paid by the Fund to the Capital Market
Regulatory Fees Authority. Value added tax and all other taxes applied in the future shall be excluded from
(to be paid to CMA the amounts paid under Regulatory Fees.
A fixed fee of SR 5,000 per annum shall be paid by the Fund to Tadawul as publishing fees.
Publishing Fees
Such fees shall be calculated at every day of valuation and payable upon request. Value
(to be paid to
added tax and all other taxes applied in the future shall be excluded from the amounts
Tadawul)
paid under Publishing Fees.
Page | 14The Fund shall pay Tadawul the following listing fees:
• SR 50,000 as primary listing fees.
Listing Fees (to be • 0.03% per annum of the Fund's market value (provided such fees shall not be less
paid to Tadawul) than SR 50,000 and not exceeding 300,000 per annum)
Value added tax and all other taxes applied in the future shall be excluded from the
amounts paid under Listing Fees.
The Fund shall pay Tadawul the following registration fees:
• SR 50,000, in addition to SR 2 for each unit holder up to a maximum of SR 500,000,
Registration Fees in return for the issuance of a record for the unit holders; and
(to be paid to • SR 400,000 in return for the operation of a record for the unit holders. Such fees
Tadawul) are subject to change based on the gross volume of Fund offering.
Value added tax and all other taxes applied in the future shall be excluded from the
amounts paid under Registration Fees.
The Fund will ensure that fees paid to real estate managers are discussed on a commercial
basis in all its aspects and in a manner consistent with market prices. Such fees are paid
from the Fund's basic assets. The target is that annual property management fees for
Properties primary assets will not exceed 5% of the total annual rent for primary assets. All property
Management Fees management fees payments are calculated to include VAT, withholding tax and all other
taxes applied in the future considering that there is currently only one property
management contract for the fall warehouses and the value of this contract is equivalent
to 2.5% of the total rents of warehouses, paid to the director of property after collection.
If the Fund is going to carry out development activities in the future of no more than 25%
of the total value of the Fund's assets, the Fund shall ensure that any development fees
Development
incurred by the Fund and paid to the Developers shall be negotiated on a basis consistent
Fees
with market prices. To avoid doubt, the Fund did not incur any development fees in
respect of the primary assets.
The Fund may directly or indirectly incur other fees and charges, including but not limited
to, service costs, property insurance fees acquired by the Fund, legal fees and zakat (if
applied to traded real estate investment funds, excluding private zakat for unit holders)
Municipal fees, government fees, valuation fees, engineering consultant fees, and fees of
surveyors, architects and interior designs engineers.
Other Fees
In all cases, only actual fees and expenses related to the Fund and its projects shall be
deducted after the approval of the Fund's Board of Directors is obtained. Such expenses
are expected not to exceed 1% of the total value of the Fund's assets per annum based
on the latest audited financial statements. Such percentage must be updated periodically
and published on the Fund Manager's website.
unit holders The liability of each unit holder shall be limited to the value of his investment in the Fund,
Liability and it cannot be recourse against the unit holder with respect to any of his other assets
The risk level is medium to high. There are some risks associated with investing in the
Risk Level& Risk Fund. Paragraph (f) of these Terms and Conditions comprises examples of these risks, and
Factors the potential investor shall carefully consider thereof before taking a decision to invest in
the units offered.
Page | 15The Fund shall be governed by the applicable laws of the Kingdom of Saudi Arabia and
regulations issued by CMA. The Fund, in its investments, shall be committed to the statute
Governing Law & of real estate ownership and investment by non-Saudis. Both the Fund Manager and each
Disputes investor shall endeavor to resolve any dispute arising out of or in connection with these
Settlement Terms and Conditions and any problems that may arise in this respect amicably. The
dispute may be referred by either party to Securities Disputes Resolution Committee of
the Capital Market Authority
Steps Expected duration
Finalize the acquisition of the primary
assets and entering into a sale, purchase 60 days post-closing date
and leasing agreement, and Sukuk
conveyance for the Fund.
Start trading in the Fund's units in the Saudi First quarter of 2019
Stock Exchange
Offering period 10 working days starting from 25/03/2019)
and ending in 07/04/2019
If the required amount is not collected,
Projected the Fund Manager will extend the
Schedule Extension of offering period subscription period for 20 working days
after approval by the Capital Market
Authority.
Announcing allocation of units During 15 working days post-closing date
5 business days after the announcement of
Refund of surplus funds
the allocation of units
The Fund Manager intends to distribute
annual cash dividends to the investors not
less than 90% of the Fund's annual net
Dividends
profit, provided to be at least two times at
the end of June and December of each
calendar year.
Page | 16Terms and Conditions
This document comprises the terms and conditions related to SHUAA REIT FUND, a general traded closed-end real
estate investment fund compliant with Islamic Shariyah rules. The Fund is operated by SHUAA Capital Saudi Arabia
(“SCSA”) and is licensed by the Saudi Arabian Capital Market Authority as a licensed person under License No. 07056-
37, and these terms and conditions constitute the contractual relationship between the Fund Manager and the unit
holders under which the Fund was established.
The Fund's units will be listed on the Saudi Stock Exchange and the Fund's official currency will be the Saudi Riyal
pursuant to the approval of CMA and after the transfer of ownership of the primary assets in the Fund.
A. Name and type of the Fund
SHUAA REIT FUND, a general traded closed-end real estate investment fund compliant with Islamic Shari'a
rules, it was incorporated under the laws and regulation applicable in the Kingdom of Saudi Arabia and the
Saudi Arabian Capital Markets related instructions.
B. Address of the Head Office and Website of the Fund Manager
Address: SHUAA Capital Saudi Arabia (SCSA)
Hamad Tower, King Fahad Road, 27th Floor
P.O. Box 8181. Riyadh 11482
Riyadh, kingdom of Saudi Arabia.
Website: www.shuaacapital.com.sa
C. Fund Term
The period of the Fund shall be 99 years from the date of listing the units in Tadawul ("Listing Date") and made
them available for trading ("Fund Term"), and shall be renewable for a similar period at the discretion of the
Fund Manager following the approval of the CMA.
D. Investment Fund Objectives
The investment objective of the Fund is to invest in structurally developed real estates and through which
periodic and rental income can be achieved. 90% of the net profit of the Fund is distributed to the unit holders
in cash on a semi-annual basis at the end of December and June of each year during the Fund's period as a
minimum and the Fund Manager may increase distribution times to be quarterly if possible. Dividends do not
include profits arising out of the sale of the principal real estate assets and other investments that can be
distributed to the unit holders or reinvested in acquiring new assets or renewing existing assets (The decision
is made within 90 days of the sale of any of the Fund's assets) or investment in short-term Murabaha
transactions in Saudi riyals, and Funds of capital markets in the Kingdom of Saudi Arabia, debt instruments,
listed real estate companies or other real estate investment funds and Sharia-compliant investment funds,
provided that the Fund's investments shall not be less than 75% of the total value of the assets of the Fund in
real estate assets that have been developed in order to achieve rental and periodic income.
The Fund generally seeks to retain a diversified portfolio of income-generating real estate assets whether
inside or outside the Kingdom of Saudi Arabia (taking into consideration the restrictions in this respect
contained in the applicable regulations and in these Terms and Regulations), including but not limited to,
versatile real estate including residential, commercial, industrial, agricultural, office, retail, logistics,
Page | 17hospitality, healthcare and education. Target sectors for primary assets include each of the commercial, office,
logistics and residential sectors.
Where the Fund will continue to invest mainly in the developed and ready-to-use real estate assets, however,
it may also seize the opportunity to invest in real estate development projects (including renewal of existing
real estate assets) with a value not exceeding 25% of the total value of the Fund's assets in accordance with
the latest audited financial statements in order to increase the investors' units value, provided that (1) the
Fund's investments shall not be less than 75% of the total value of the Fund assets in a structurally developed
real estate assets with a view to achieving rental and periodic income and (2) the Fund shall not invest in Idle
Land.
E. Summary of Fund Strategy
The Fund will strive to achieve its investment objectives and maximize the value of investors' units as high as
possible by:
(A) Reinvesting income in real estate investment assets; after distributing at least 90% of its annual net profit to
unit holders, excluding capital gains from the sale of real estate assets and other investments; and
(B) Optimizing the operational performance of fund assets to maximize returns.
The Fund intends to adopt investment criteria that have been carefully examined and planned, taking into
account the nature of the real estate sector, demand and supply, geographical and political factors and the
cyclical fluctuations of various categories of the real estate sector. The Fund intends also to invest mainly in
mixed use real estate as well as in residential, commercial, industrial, agricultural, office, retail, logistics,
hospitality, healthcare and education.
1- A description of the types of real estate assets in which the Fund will invest
1-1 General description of sectors where primary assets are located
Based on paragraph (e) of these Terms and Conditions, the Fund Manager will invest in properties
that take into account the Fund's investment strategy throughout the duration of the Fund,
including residential, commercial, industrial, agricultural, office, retail, logistics, hospitality,
healthcare and education. The target sectors for primary assets include each of the commercial,
office, logistics and residential sectors.
It is intended to maintain real estate investments consisting of versatile real estate through the
adoption of different strategies, including those listed below which are the main focus of the Fund:
- Acquire income-generating real estate; and
- Acquire income-generating real estate that are un-utilized optimally and then restoration and
renovation of real estate
1-2 Description of primary assets
The Fund intends to acquire the primary assets described in this paragraph below under a sale
and purchase agreement for this purpose. The Fund may acquire additional properties in the
future as the Fund Manager and Fund Board deemed in the benefit of the Fund.
The purchase price of the primary assets will be SR 572,700,000 (Five hundred seventy two million and seven hundred
thousand riyals), the details are as follows:
Page | 18% of the
Property Acquisition Net Rent Acquisition
Asset Ownership Location
condition Amount (SR) (SR)* Amount to
Fund Size
Elite Mall Freehold developed Riyadh 201,500,000 16.000.000 34.06%
Al Nada Center Freehold developed Riyadh 70,000,000 6.050.000 11.83%
Freehold
Al Khorayef Warehouses developed Riyadh 130,000,000 11,255,400 21.97%
EURO Residential Freehold
developed Riyadh 19,200,000 1,650,000 3.24%
Compound
Al Mutlaq Furniture Freehold
developed Riyadh 102,000,000 8,000,000 17.24%
(Roomz)
Al Mutlaq Furniture Freehold
developed Riyadh 50,000,000 4,075,000 8.45%
(Olaya)
Total 572,700,000 47,030,400 96.8%
** Acquisition fees (brokerage fees) 14,317,500 2.42%
*** Capital structuring fees 4,482,500 0.75%
Fund gross volume 591,500,000 100%
* The net rent is calculated after deducting all the property direct expenses (maintenance and property management expenses)
** Paid to independent real estate brokers who contributed to the acquisition according to the contracts signed with them.
*** Paid to the Fund Manager
1-3 Summary of Fund Portfolio
A- Details of targeted returns for the unit holders:
Property Name 2019 2020 2021 2022
Elite Mall 16,000,000 16,000,000 16,000,000 16,000,000
Al Nada Trade Center 6,050,000 6,050,000 6,050,000 6,050,000
Al Khorayef Warehouses 11,255,400 11,255,400 11,255,400 11,255,400
EURO Residential Building 1,650,000 1,650,000 1,650,000 1,650,000
Al Mutlaq Furniture (Rooms) 8,000,000 8,000,000 8,000,000 8,000,000
Al Mutlaq Furniture (Olaya) 4,075,000 4,075,000 4,075,000 4,075,000
Total 47,030,400 47,030,400 47,030,400 47,030,400
Fund fees & expenses 6,006,490 6,006,490 6,006,490 6,006,490
% of fees & expenses from Revenue 1% 1% 1% 1%
Net returns after deducting all the 41,023,910 41,023,910 41,023,910 41,023,910
Fund fees & expenses
% of Total returns before deducting 7.95% 7.95% 7.95% 7.95%
the Fund expenses
% of Net returns after deducting the 6.94% 6.94% 6.94% 6.94%
Fund expenses*
* The fees and expenses of the Fund were deducted from the total net rent proceeds (as shown in the table above), the net return was then divided on the Fund
size which is SR 591.5 million.
Page | 19Description Number/ Value
Total number of properties to be acquired 6
Number of Freehold properties 6
Number of Lease Interest contracts 0
Number of fully developed properties 6
Properties under construction 0
% income generating properties out of total assets 100%
properties under construction out of total assets 0%
Total cost of property purchase (SR) 572,700,000
Amounts to be collected from the public (SR) 305,150,000
Total volume of the Fund (SR) 591,500,000
Kingdom of Saudi Arabia
Geographical Distribution of Fund Assets
(Riyadh)
Total net rent for targeted assets for 12 months (2019) (SR) 47,030,400
Net income after deduction of all fund fees and expenses (2019) (SR) 41,023,910
% Net income after deduction of all fund fees and expenses (2019) (SR) %6,94
% leased area 100%
% of lease interest contracts 0%
% properties outside the Kingdom 0%
B- Summary of real estate assets: assets to be acquired
1st property: Elite Mall Location
Mixed use complex that contains F&B, Retail, and
office spaces at Al Sulaimania District on Prince
Abdul Aziz bin Musaed Bin Jalawi Street (Al
Dhabab) near its intersection with Prince
Mohammed Bin Abdul Aziz Street (Tahlia) in the
center of Riyadh city. The complex comprises a
ground floor and mezzanine containing 15 units
of stores and restaurants with different areas,
while the 2nd floor and annex include various
office spaces, as well as more than 240 parking
spaces serving the complex.
Asset information
Name of the property Elite mall
Type of the property Restaurants, Retail and offices
Riyadh- Prince Abdul Aziz bin Musaed Bin Jalawi Street (Al Dhabab), Al
location
Sulaimania District
Land area 9,600 square meters
Built area 21,929 square area
Page | 20Landlord Khalid Bin Abdulaziz Bin Mohammed bin Nafjan.
Date of Building completion
15/08/1439H
certificate
The shops were leased by the main tenant and will be officially opened
Asset operation date
on 1/1/2019G
Age of the property Less than 1 year
Number of floors Basement+ ground floor+ Mezzanine+ 1st floor+ annex
Asset purchase value 201,500,000 SR
Lease contracts
Current lease contracts 2 contracts
- Almashria AlOula Co. under a principal contract includes the
ground floor, mezzanine with rental value of 12 million Saudi Riyals
per annum.
- Mr. Adnan Bin Hamad Bin Homoud AL Khamis: principal contract
Main tenant includes the 1st floor, upper extensions and basement with rental
value of 4 million Saudi Riyals per annum.
Lease payments are due to the Fund when the property is transferred to
the Custodian of the Fund.
Leased area (m2) 11,142, The area is 13,672 with the addition of external leasable areas
Annual rental value (SR) 16,000,000
Price of leased meter (SR) 1,436
Contracts term Five years commences after transferring the asset ownership to the Fund
Sub-lease The tenant is allowed to sub-lease the property after a prior consent of
the Fund Manager.
% asset occupancy 100%
The Tenant shall pledge to the Lessor to insure the property and any item
of an insurmountable nature, including all constants and fixtures of the
Building, during the term of the Lease Contract against the Insured Risk,
Insurance and shall be maintained in accordance with the requirements of the Lease
Contract. The coverage extends to the full cost of restoring the building
to its original condition, including the cost of permits, demolition and
reconstruction costs.
7 semi-annual promissory notes (3.5 years), where the value of each lease
Guarantees is equal to 6 months as agreed in the lease contracts. These contracts
cover 70% of the rental value for the lease period (five years)
Binding and irrevocable contract, and if the contract is terminated by
either party for any reason, the tenant is obliged to pay the remainder of
Contracts terminations the lease under the Lease Contract. The tenant also has the right to renew
the contract for a similar period provided that rental value is subject to
increase 15% than the previous period.
Governing Law Laws and regulations applicable in the Kingdom of Saudi Arabia
Properties management contract
Properties manager The properties are managed by the tenants as per the service agency
contracts entered with them.
Page | 21Details of the contract Not applicable.
Rental income over the next three years
Year 2019 2020 2021
Total rental value (SR) 16,000,000 16,000,000 16,000,000
Net operational income (SR) 16,000,000 16,000,000 16,000,000
Operational returns (%) 7.94% 7.94% 7.94%
The average rental valuation of the asset based on prevailing market prices according to the reports of the
Accredited Valuators as of 26/11/2018 (to compare with the rental prices of the signed contracts)
Valuer: white cubes SR 17,443,089
Valuer: ValuStrat Co. SR 15,800,000
Average SR 16,621,544
Rental income over the next three years
Not applicable as the real estate asset operation period being less than one year. Most of which have periods of
grace for secondary tenants. The first year's rent will be paid by the main tenants when the title deed is transferred
to the Custodian of the Fund.
2nd property: Al Nada Center Location
Retail, F&B, and office complex located at the
intersection of Al Thumama Street with Othman
Bin Affan Street north of Riyadh city next to Imam
University. The complex consists of a ground
floor and a Mezzanine that contains 10 stores,
2nd floor and an annex that contains 24 offices
and 90 parking spaces serving the complex.
Asset information
Name of the property Al Nada Center
Type of the property Stores and offices
Riyadh- intersection of Al Thumama Street with Othman Bin Affan Street,
location
Al Nada District.
Land area 4,685 m2
Built area 9,742 m2
Landlord Wedad Bint Abdulaziz Bin Abdul Mohsen Al Twaijri.
Date of Building completion
26/10/1439H
certificate
Asset operation date 26/10/1439H Corresponding to 10/07/2018G
Age of the property Two years
Number of floors Basement+ ground floor+ Mezzanine+ 1st floor+annex
Asset purchase value SR 70,000,000
Page | 22Lease contracts
Current lease contracts One principal contract
Ayar Real Estate Co.
Main tenant(s) Lease payments are due to the Fund when the property is transferred to
the Custodian of the Fund.
Leased area (m2) 7,664
Annual rental value (SR) 6,050,000
Price of leased meter (SR) 789
Contracts term Five years commences after transferring the asset ownership to the Fund
Sub-lease The tenant is allowed to sub-lease the property
% asset occupancy 100%
The Tenant shall pledge to the Lessor to insure the property and any item
of an insurmountable nature, including all constants and fixtures of the
Building, during the term of the Lease Contract against the Insured Risk,
Insurance and shall be maintained in accordance with the requirements of the Lease
Contract. The coverage extends to the full cost of restoring the building
to its original condition, including the cost of permits, demolition and
reconstruction costs.
7 semi-annual promissory notes (3.5 years), where the value of each lease
Guarantees is equal to 6 months as agreed in the lease contracts. These contracts
cover 70% of the rental value for the lease period (five years)
Binding and irrevocable contract, and if the contract is terminated by
either party for any reason, the tenant is obliged to pay the remainder of
Contracts terminations the lease under the Lease Contract. The tenant also has the right to renew
the contract for a similar period provided that rental value is subject to
increase 15% than the previous period.
Governing Law Laws and regulations applicable in the Kingdom of Saudi Arabia
Properties management contract
The properties are managed by the tenants as per the service agency
Properties manager
contracts entered into with them.
Details of the contract Not applicable as the tenant is the responsible for managing the property.
Rental income over the next three years
Year 2019 2020 2021
Total rental value (SR) 6,050,000 6,050,000 6,050,000
Net operational income (SR) 6,050,000 6,050,000 6,050,000
Operational returns (%) 8.64% 8.64% 8.64%
The average rental valuation of the asset based on prevailing market prices according to the reports of the
Accredited Valuators as of 26/11/2018 (in order to compare with the rental prices of the signed contracts)
Valuer: White Cubes SAR 7,327,094
Valuer: ValuStart Co. SAR 6,097,300
Average SAR 6,712,197
Rental income over the next three years
Not applicable as the real estate asset operation period being less than one year. The first year's rent will be paid
by the main tenant when the title deed is transferred to the custodian of the fund.
Page | 233rd property: Al Khorayef Warehouses Location
Fully equipped and licensed typical warehouses
located on Al-Kharj road in the industrial zone in Tiba
district south of Riyadh city, contains 64 warehouses
distributed on a land area of 85,000 square meters.
Asset information
Name of the property Al Khorayef Warehouses
Type of the property warehouses
location Riyadh- AL Kharj Road, Tiba District
Land area 85.000 m2
Built area 63.355 m2
Landlord Abdullah Ibrahim Al Khorayef Sons Co.
Date of Building completion
15/01/1439H
Certificate
Asset operation date 15/01/1439H
Age of the property One year
Number of floors Single floor contains warehouses
Asset purchase value SR 130.000.000
Lease contracts
Current lease contracts Two contracts
- Al Khorayef Investment Co. (Limited Liability Company): a warehouses tenant
with a total area of 23,090 square meters and an annual rental value of SAR
4,271,650.
Main tenant(s) - LSC Logistics and Ware housing (Closed Joint Stock Company): a warehouse
tenant with a total area of 39,310 square meters and an annual rental value
of SAR 7,272,350.
Lease payments are due to the Fund when the property is transferred to the
Custodian of the Fund.
Leased area (m2) 62,400
Annual rental value (SR) 11,544,000
Price of leased meter (SR) 185
- Al Khorayef Investment Co. (Limited liability Company): five years binding
start from 29/07/2018G.
Contracts term - LSC Logistics and Ware housing (closed Joint Stock Company): five years
binding start from 01/07/2017G.
Returns to the Fund shall be due upon the transfer of the deed to the
ownership of the custodian appointed by the Fund
Sub-lease The tenant is allowed to sub-lease the property without prejudice to the terms of
Page | 24the contract entered into with the landlord
% asset occupancy 100%
The property will be insured by the tenant according to the signed contracts. The
Insurance
required coverage will include all constructional and structural damages.
Guarantees N/A
Contracts terminations Binding and irrevocable contract.
Governing Law Laws and regulations applicable in the Kingdom of Saudi Arabia
Properties management contract
Properties manager Dar Al Idara Real Estate Company
The properties manager is responsible for the property management as a whole
and it includes (1) collection of rental value (2) leasing, renewing, implementing
and enforce current lease contracts on behalf of the landlord. (3) Property
Details of the contract management and follow-up. The contract period is 3 renewable years and shall
be renewed unless the Properties Management Manager is otherwise notified by
the Fund Manager. The Properties Manager shall have the right to receive a fees
amounting to 2.5% of all rental value to be payable after collection.
Rental income over the next three years
Year 2019 2020 2021
Total rental value (SR) 11,544,000 11,544,000 11,544,000
Net operational income (SR) 11,255,400 11,255,400 11,255,400
Operational returns (%) 8.65% 8.65% 8.65%
The average rental valuation of the asset based on prevailing market prices according to the reports of the
Accredited Valuators as of 26/11/2018 (in order to compare with the rental prices of the signed contracts)
Valuer: White Cubes SAR 10,920,000
Valuer: ValuStart Co. SR 10,420,000
Average SR 10,670,000
Rental income over the next three years
Year 2016* 2017 2018**
Rental value N/A 9,672,000 11,544,000
* The asset was not operated
** As per the current contracts
4th property: EURO Residential Building Location
Residential building located in the center of Riyadh
near King Abdulaziz Road with the intersection of Al
Orouba Road in Sulaimania District in Riyadh city and
contains 28 fully furnished apartments plus facilities
allocated to the residents such as Gym and cafe. The
building consists of a ground floor, a first and second
floor and an extension, as well as 28 parking spaces to
serve the inhabitants.
Asset information
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