Circulars to Fund Unit Holders
Al Rajhi Capital, the Fund Manager of Al Rajhi REIT has received an email stating notice of termination for lease contract of Blue Tower Building, AlKhobar and Luluah Warehouse, Riyadh under force majeure clause sighting COVID-19 pandemic situation in the Kingdom.
Currently Blue Tower Building, AlKhobar and Luluah warehouse, Riyadh are leased on triple net basis to Rawaj Real Estate Company at an annual rent of SAR 18.3 Mn and SAR 13.6 Mn respectively. Both these assets together contribute SAR 31.9 Mn i.e. 19.4% of total revenue of the fund.
The impact caused by the event:
The Fund Manager is ascertaining the validity of this email notice and believes that the lessee does not have right to terminate these leases. The Fund Manager will take all possible actions including legal action to protect the interest of unit holders.
As the situation is still evolving, the financial impact on fund’s dividend can’t be ascertained at this time. The Fund Manager shall periodically update the unitholders of any material development arising in this matter in due course of time