SEDCO Capital REIT board OKs Palm View acquisition for SAR 650M

SEDCO Capital, manager of the SEDCO Capital REIT Fund, announced that the fund’s board of directors signed a purchase agreement and completed the acquisition of Palm View office complex in Riyadh for SAR 650 million (excluding any acquisition-related fees).

Located at Ad Diriyah, the property offers a total leasable area of 20,840 square meters, with an eight-year term binding lease term, SEDCO Capital said in a statement to Tadawul.

The property is leased under a single-tenant agreement to Jadwa Al Basateen Real Estate Co., with an annual rental value of SAR 55.55 million. The lease includes a 10% rent escalation starting from the sixth year.

Moreover, the fund manager also signed a 10-year property management agreement with Jadwa Al Basateen Real Estate Co., valued at SAR 3 million annually, with a 10% increase starting from the sixth year, under which the company will handle all operational responsibilities for the property.

The acquisition was financed through credit facilities granted to the fund.

A positive financial impact is expected to reflect to the fund’s real estate portfolio and overall performance and results, the statement noted.

According to data compiled by Argaam, last May, SEDCO Capital announced the signing of two non-binding memoranda of understanding to acquire four office complexes in Riyadh.