Riyad REIT acquires $37m Saudi Electronic University building
Fully leased by the Ministry of Education for the Saudi Electronic University, the property offers an annual net income of $3.2m
Riyad REIT has signed an agreement to acquire the Saudi Electronic University's building for $37m (SAR137.65m).
The agreement between the real estate investment trust (REIT) and the kingdom's Higher Education Fund was signed on 12 October, 2017.
Located in Riyadh's Ar Rabi district, the property has a net leasable area of 17,000m2, Riyad REIT revealed in a missive issued to the Saudi bourse.
Fully leased by the Ministry of Education for the Saudi Electronic University, the property offers an annual net income of $3.2m (SAR12m).
Income generation will begin immediately upon the transfer of ownership, and Riyad REIT will fund the acquisition through its capital fund increase, worth more than $267m (SAR1bn), announced on 22 May, 2017.
Riyad REIT was launched on 9 June, 2015, and listed on Tadawul on 13 November, 2016.
The deal with Higher Education Fund is Riyad REIT's latest in a string of acquisitions this year.
In May 2017, the REIT announced it would use its $267m capital fund hike to finance the acquisition of the Kempinski Riyadh Hotel Complex, The Residence, and Omnia Centre.
The Kempinski Riyadh property includes a five-star hotel, a ballroom, a business centre, a spa, six restaurants, residential apartments, and retail outlets.
Omnia Centre, located in Jeddah's Rawdah district, includes offices, retail units, and residential apartments.
Meanwhile, The Residence is a high-end development in Riyadh's Hiteen district.
In a missive issued to the Saudi bourse this September, Riyad REIT said the 15,000m2 property was acquired for $36.4m (SAR136.7m), and was financed through Shariah-compliant bank debt.
The Residence is a newly developed property that is currently under the leasing phase.
As of September, 82% of the property was occupied, and since Q2 2017, has generated rent worth $1.5m (SAR5.8m).
The Residence's hospitality component is set to be operated by Boudl Hotel and Resort under the Braira Hitten brand name.
Operations of the hotel component are expected to commence in Q4 2017.