Sedco Capital REIT fund supply increases 64% to $ 479 million


Sedco Capital, a global, ethical-led, Sharia-compliant asset management and investment advisory firm, announced that it has successfully completed the additional offering of the Traded Real Estate Investment Fund (REIT) of Sedco Capital.

Launched in 2018, the Sedco Capital REIT fund is a closed-end, Sharia-compliant REIT that aims to achieve periodic cash distributions to unitholders by investing in high-quality income-generating real estate assets across various industries. , in particular hotels, commerce, offices. , residential and educational. Investments are mainly concentrated in the main Saudi cities of Jeddah, Riyadh and Dammam.

With this additional offering, Sedco Capital increases the total asset value of the fund by 64% to SR 1.8 billion ($ 479 million) through in-kind and cash subscriptions and additional Sharia-compliant funding .

According to Sedco Capital, the Fund received 78,231 subscription requests from 227,192 retail and institutional investors. In addition, he offered up to RS 325 million through in-kind subscriptions.

The successful offer resulted in a 339% oversubscription with a total value of RS 848 million.

The units will be allocated to unitholders within a maximum period of 15 working days from the closing date of the additional offer period in accordance with the allocation mechanism described in the additional appendix to the general conditions of the Fund.

The proceeds of the additional capital increase will be used to acquire eight properties in the education and commercial sectors, located in Riyadh and Dammam.

The post-acquisition portfolio of Sedco Capital REIT Fund is expected to generate gross rental income of SAR 49.4 million per year, which translates into a rental yield of 7.5%. The target net return on total asset value is expected to exceed 7.0%.

Regarding the additional REIT offering, CEO Samer Abu Aker said: “We are very satisfied with the outcome of the additional offering, reflecting the strong demand for participation in the Sedco Capital REIT fund. This oversubscribed offering represents a strong vote of confidence from existing and new businesses. subscribers to our Saudi real estate investment strategy. “

Business Development Director Abdulwahhab Abed said: “Since its inception, we have always managed the SEDCO Capital REIT fund in a way that provides investors with access to attractive real estate assets in major cities of Saudi Arabia. .

“This additional offering increases the Fund’s exposure to income-generating properties in more diversified sectors across the Kingdom, including the education sector. The Fund also aims to increase the percentage of long-term leases with increase in rents with credible tenants, which in our view contributes to achieving stability and growth and will improve the long-term risk-return profile of the Fund, overall. We believe that the oversubscription illustrates the appreciation that investors have about our investment approach, ”he added.

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