Fund Fact Sheet KEY FUND TERMS Fund Name Alkhabeer REIT Fund Term 99 years Fund Manager Alkhabeer Capital Fund Currency Saudi Arabian Riyal Investment Objectives The main investment objective of the Fund is to generate continuing rental income yield and periodic cash distributions Fund s Assets Size 1 SAR billion Fund Capital 664.42 IPO Size 237.54 9% annually Target Net Returns Quarterly Distribution Policy Shari a Principles The Fund is Shari a Compliant Leverage The Fund will obtain a Shari a Compliant credit facility totaling SAR 340 million Management Fees 9% per annum of the net annual rental amount collected from the assets owned by the Fund. Management fees shall not exceed 0.75% of the Fund s Net Asset Value based on the Fund s most recent valuation Other Fees The Fund pays structuring, Shari a advisory, audit, valuation, custody, administration and other fees and expenses 1
THE FUND S COMPETITIVE ADVANTAGE Target Returns of 1 Distribution Policy 9% Annually 2 3 No Subscription Fees The Fund s net return of 9% per annum is amongst the highest compared to other REITs listed on the Saudi Stock Exchange (Tadawul). The Fund distributes cash returns quarterly. All subscribers are exempted from subscription fees. 4 5 6 Fund Manager s Investments Linking Management Fees to Rents Lock-up Period for the Property Owners Units The Fund Manager holds Fund Units amounting to SAR 48.9 million, which supports the alignment of their interests with those of the Unitholders. The Fund s management fees are calculated as a percentage of collected rents. This will align the Fund Manager s interests with those of the investors in the long run. Management fees shall not exceed 0.75% of the Fund s Net Asset Value. The property owners invest SAR 426.9 million in-kind in the Fund, and shall be restricted from selling their Units (for a period of one year). This confirms the property owners confidence in the performance of their properties and supports the alignment of their interests with those of the Fund. 7 Diversified Assets Accredited and Portfoli 8 Conservative 9 Valuation Methods Acquisition at lower than valuation Seven properties distributed in the retail, office and residential segments in Jeddah, Riyadh and Tabuk. The properties were valued by companies licensed by the Saudi Authority for Accredited Valuers (TAQEEM). The total acquisition price of the properties is SAR 960.3 million, as compared to an average valuation (as per valuation reports) of SAR 1,001 million. 10 11 12 Diversified Tenant Base Length of Lease Terms Guaranteed Rental Income A diversified tenant base including public and private sector tenants. The average lease term of the Fund s properties is around 10 years. Signed 100 promissory notes with a total value of SAR 619 million as guarantee of rental payments. 2
FUND S PORTFOLIO The Fund s initial portfolio of real estate assets includes properties in the retail, office and residential segments, strategically located in Jeddah, Riyadh and Tabuk. Number of Developed Properties 6 Number of Properties Under Construction* 1 Occupancy Rate 100% Properties Acquisition Price 960.3 Total Rental Income** 89.2 Leasable Area 139.8 Thousand Square Meters Tabuk Gallery Mall Riyadh Palazzo Center Homeworks Center Almalga Residential Compound Jeddah Elite Commercial Center Ahlan Court BIN II Commercial Center * Gallery Mall (under construction) lease period to start as from its acquisition date ** Target total rental return of the properties during the first year of the Fund 3
Overview of the Properties 7 properties distributed in 3 major cities in the Kingdom of Saudi Arabia: # Property Real Estate Segment City Development Status Ownership / Leasehold Acquisition Price (SAR) Total Annual Rent (SAR) Occupancy Rate 1 Homeworks Center Retail Riyadh Developed Freehold 78,000,000 6,000,000 100% 2 Palazzo Center Retail Riyadh Developed Freehold 93,300,000 8,073,308 100% 3 Almalga Compound Residential Riyadh Developed Freehold 314,000,000 20,186,111 100% 4 Gallery Mall Retail Tabuk Under Construction Leasehold 155,000,000 22,959,000 100% 5 Elite Center Mixed Use Jeddah Developed Freehold 160,000,000 16,000,000 100% 6 Ahlan Court Retail Jeddah Developed Freehold 70,000,000 7,000,000 100% 7 BIN II Center Mixed Use Jeddah Developed Freehold 90,000,000 9,000,000 100% Total 4 Retail 2 Mixed Use 1 Residential 3 Riyadh 1 Tabuk 3 Jeddah 6 Developed 1 Under Construction 6 Freehold 1 Leasehold 960,300,000 89,218,419 100% Distribution of Investments by Location 33% Jeddah 16% Tabuk Riyadh 51% Distribution of Investments by Real Estate Segment 26% Mixed Use (retail shops and business offices) 33% Residential Retail (retail shops and shopping malls) 41% 4
1. HOMEWORKS CENTER RIYADH PROPERTY PHOTOGRAPHS 2. PALAZZO CENTER 3. ALMALGA RESIDENTIAL COMPOUND RIYADH RIYADH 4. GALLERY MALL 5. ELITE COMMERCIAL CENTER TABUK JEDDAH 6. AHLAN COURT 7. BIN II COMMERCIAL CENTER JEDDAH JEDDAH 5
Initial Public Offering Minimum Subscription 500 SAR Commencement of Offering 11 November 2018 Maximum Subscription 33.22 Closing Date 29 November 2018* Unit Price 10 SAR Subscription Fees No Subscription Fees Fund Manager Lead Manager Receiving Banks National Commercial Bank Al Rajhi Bank Riyad Bank Aljazira Capital Arab National Bank Banque Saudi Fransi * The Fund Manager may extend the offering period of the Initial Public Offering for a period of 20 business days subject to the approval of the Fund Board and the Capital Market Authority. FOR FURTHER INFORMATION FUND MANAGER Alkhabeer Capital Tel: +966 920010707 www.alkhabeer.com CMA License No: 07074-37 CR No: 4030177445 Disclaimer This document does not constitute an offer to buy, subscribe or participate in any way in Alkhabeer REIT, nor shall it (or any part of it) form the basis of, or be relied on, in connection with, or act as inducement to enter into any contract whatsoever. Prospective investors should read Alkhabeer REIT s Terms and Conditions and their contents related to investment risks as well as other Alkhabeer REIT documents carefully prior to making any investment decision. They are available on Alkhabeer Capital s website www. alkhabeer.com. This investment is not a cash deposit with a local bank. The value of the amount invested and any other income which may arise therefrom, may increase or decrease. All prospective investors are required to make their own determination, with their own financial and legal advisors, and evaluate all risks involved. No assurance can be given that the targeted and projected results will be achieved. Moreover, past performance of the Fund is not a guarantee of future performance. By investing in the Fund, the investor acknowledges having read and accepted the Fund s Terms and Conditions. 6