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Derayah Financial Announces the Occurrence of an Event for Derayah REIT

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Announcement Detail Derayah Financial, the fund manager of Derayah REIT, announces the signing of a purchase agreement on 01/11/2018G to acquire a portfolio of logistic real estate assets in the Kingdom of Saudi Arabia for a total consideration of SAR269 million. The expected timeframe to complete the transfer of the Property is 90 days, extendable by mutual consent.

The first property is located in Al-Sully district in Riyadh, and positioned on the north of the Southern Ring Rd. and east of Istanbul St. The property is a logistic complex consisting of 12 stand-alone warehouses of different sizes within an enclosed perimeter. The property’s total built-up area is 96,800 sqm, and built on a land area of 214,600 sqm. The acquisition value of the first property is SAR196 million.

The second property is located in Al-Khumrah district in Jeddah, and positioned on the east of King Faisal Rd. The property is a logistic complex consisting of 5 stand-alone warehouses of different sizes within an enclosed perimeter. The property’s total built-up area is 25,800 sqm and built on a land area of 40,000 sqm. The acquisition value of the second property is SAR44 million.

The third property is located in Al-Khalidiyyah district in Dammam, and positioned on the east of King Fahad Rd. The property consists of two warehouses. The property’s total built-up area is 10,000 sqm and built on a land area of 12,000 sqm. The acquisition value of the third property is SAR18 million.

The forth property is located in Al-Mina district in Dammam, and positioned on the east of King Faisal Rd. The property consists of 3 labor housing buildings. The property’s built-up area is 5,110 sqm and built on a land area of 2,160 sqm. The acquisition value of the fourth property is SAR11 million.

The first, second and third properties will be entirely leased to Jadeer Property Management Company, a related party to the seller, for 5 years (binding) commencing on Property transfer date. The Tenant shall provide promissory notes covering the lease payments throughout the lease duration. Additionally, a guarantor agreement will be in place to enhance the strength of the lease agreement. The three properties are already sub-leased to different tenants. The three properties’ annual rent is as follows:

First property, Riyadh, Annual Rent SAR 18,230,000

Second property, Jeddah, Annual Rent SAR 4,060,000

Third property, Dammam, Annual Rent SAR 1,670,000

The forth property will be entirely leased to Emdad Human Resources Company, a related party to the seller, for 5 years (binding) commencing on Property transfer date. The Tenant shall provide promissory notes covering the lease payments throughout the lease duration. Additionally, a guarantor agreement will be in place to enhance the strength of the lease agreement. The fourth property is currently used by the Tenant for its requirements. The property’s annual rent payment is SAR 1,060,000.

It is expected that ownership of the Property will be transferred within 90 days from signing the agreement, extendable by mutual consent. The acquisition will be financed through the banking facilities available to Derayah REIT.

It is expected that the result of the acquisition will be positive on Derayah REIT’s financial performance in the first quarter of 2019. Derayah Financial confirms that there are no related parties in the acquisition except what was mentioned earlier. Derayah Financial will announce any material development as and when they occur.

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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