Jadwa Investment, a leading investment management and advisory firm in Saudi Arabia, announced the conclusion of the public offering of its first Shariah-compliant Real Estate Investment Traded Fund, Jadwa REIT Al Haramain Fund, which will invest in real estate properties in the holy cities of Makkah and Madinah. The REIT, which has an initial size of SR660 million, offered SR360 million worth of units (36 million units with nominal value of SR10 per unit) to the general public through an initial public offer during the period of April 3, 2017 to April 9, 2017. The REIT received an overwhelming response from the investing public as over 5,800 individual and intuitional investors subscribed for SR4.53 billion during the offer period, resulting in a 1,257% coverage of the offered units. As per the terms and conditions of the REIT, Jadwa Investment announced full allocation of up to 1,000 units for each subscriber. Allocation for the remaining units has been done on a pro-rata basis, resulting in approximately 6.746% allocation above the minimum 1,000 units. Furthermore, Jadwa announced that the refund of the excess subscription amount to investors will be done before the end of next week.
Commenting on the success of the public offer, Tariq Al Sudairy, Managing Director and CEO of Jadwa Investment, said "Jadwa REIT Al-Haramain Fund is the first REIT Fund that offers investors the opportunity to invest in the attractive Al Haramain real estate markets through a liquid investment vehicle and without the need for a large investment outlay. This, along with the attractive expected yield of the REIT, were the reasons behind the tremendous response during the public offering. REITs in general and real estate investments in the two holy cities in particular are an integral part of Jadwa's growth strategy going forward."
Describing the REIT, Haitham Al Ghannam, Head of Alternative Investments at Jadwa, said "the initial portfolio of the REIT will comprise of two hospitality assets, a four-star hotel and a pilgrim accommodation. Both properties are located in Makkah with a combined capacity of 984 hotel rooms. The four-star hotel is located within 500 meters of Masjid Al Haram, while the pilgrim accommodation is located approximately 900 meters from Mina. At its initial offer price of SR 10 per unit, the REIT offers net initial yield of 5.2%, which is an attractive yield when compared with other similar investment opportunities focusing on Makkah and Madinah."
Launch of the REIT comes in line with the government's Vision 2030. The Kingdom plans to promote religious tourism with the aim to double the number of Hajj and Umrah pilgrims by 2020. "We are expanding our real estate offering to help our clients benefit from the expected growth in religious tourism in the Kingdom. The REIT will look to add more attractive properties in Makkah and Madinah in the near future," Al-Sudairy added.
Jadwa Investment offers wide-ranging investment services that support both individual as well as corporate financial goals.
With a proven track record in asset management, private equity, real estate, fixed income investments, investment banking advisory, and investment management advisory, Jadwa Investment is a comprehensive financial services firm. — SG
