OVERVIEW Mulkia Gulf Real Estate REIT fund Approved by CMA as public offering on August 9, 2017. CMA License number: 13170-37 Dated: 5-11-2013 To carry out securities business including: Managing Investment Funds, Managing Clients Portfolios, Custody, Dealing as Principal, Underwriting, Arranging and Advising Services.
Important Notice This document has been prepared based on data from sources considered reliable by the Company. The information primarily include basic information about the economy and the market in general. In addition, the financial and non-financial assumptions were based on the best estimates available to the Company at the time of preparation of this document and may change positively or negatively at the emergence of an unexpected event after the preparation of this document. This offer is not intended to be exclusive or contain all the information that the recipient wishes to receive to evaluate the performance of the Company and / or investment risk. The recipient must base the decision on his/her own review and assessment of the investment opportunity, including the benefits and potential risks. Neither party has the right to interpret the contents of this offer as an advice in any way, and must consult with an independent adviser with respect to any relevant issues that might affect his decision. The company will make all necessary efforts to replay to questions with regards to this document as well as providing any additional information with reasonable effort if needed to answer receipts inquiries. This document is not an alternative document to Mulkia Gulf Real Estate REIT terms and conditions, and investors should read T&C thoroughly and understand the fund characteristics and risk associated with this opportunity. Investors can find the T&C on Mulkia website: www.mulkia.com.sa or Tadawul website www.tadawul.com.sa. Mulkia reserves all rights (including copy rights, trade mark rights, patents, and any other property or intellectual rights) pertaining to the information presented in this document (including all texts, graphs, illustrations, and logos). No information shall be copied, published, or distributed in any form without the written consent of Mulkia. All of the offered products and services are subject to the Terms and Conditions and disclaimers regarding the agreements in effect that govern the offering of said products and services ( Fund terms and conditions ), and any contradict between Products terms and conditions and contents of this document, will make product s terms and conditions prevail. This document with all its contents is subject to the laws and procedures of the Kingdom of Saudi Arabia, and are explained according to them. All arising conflicts due to or regarding the contents of this document must be exclusively presented to and resolved by judicial entities in the Kingdom of Saudi Arabia. 1
2 REITs General Description
Real Estate Investment Trust (REIT) A REIT is a real estate fund listed on the stock market and invests in income generating real estate assets for the purpose of achieving semi-periodic returns for the unitholders. It was first introduced and regulated in the United States in 1960. It aims to provide the opportunity to all investors to invest in income generating real estate assets. More than 30 countries around the world, including the UK, France, Turkey, South Korea, the UAE and others, have adopted its concept. Invest in Income- Producing Properties Joint Real Estate Investment REIT Income Generating The Saudi Capital Market Authority (CMA) issued the instructions for the real estate investment traded funds on 1438/1 / 23H -2016/10/24. Public Subscription Long-term Investment Horizon The first real estate traded fund in the Kingdom of Saudi Arabia was approved by CMA on Nov 8, 2016, which was Riyad REIT Fund, followed by a number of other funds. Distribution Of 90% of Net Income as a minimum 3
Advantages and Contribution to the National Economy REITs are expected to contribute to the Kingdom's economic activity and to achieve the goals of the National Transition Program 2020 and Vision 2030. Diversifying investment opportunities in the Kingdom of Saudi Arabia. Giving access to all investors the opportunity to invest in the real estate sector with less risk than direct investment. Stimulate land development and real estate projects, which will contribute to an increase in the real estate sector's share of GDP. Encouraging investments by qualified foreign investors. Risk Diversification Protection against inflation Distributions linked to lease contracts REIT Investment opportunity with minimal capital Transparency and governance Improving the transparency of the real estate sector in the Kingdom as a result of the disclosure requirements set by the Capital Market Authority. Encourage developers to develop more projects when exiting from completed projects and using proceeds in the execution of new projects. Higher Liquidity compared to direct investments Professional Investment Management 4
Comparison with Direct Investment OPERATIONAL PERSPECTIVE INVESTING PERSPECTIVE Direct Investment REIT Direct Investment REIT No Management Fees Low number of Investors Direct RE Management Frequent Valuation Fund Management Fees High number of Investors Independent RE Management Undiversified Illiquid High Investment Capital Frequent Distributions Diversified Liquid Low Investment Capital 5
Fund Management Structure Fund Manager Fund management and commitment to implement all aspects of terms and conditions and strive to achieve the objectives and strategy of the Fund. Custodian The establishment of the special purpose vehicle (SPV) and the retention of the fund s assets and related documents. Special Purpose Vehicle (SPV) Shall be owned by the Custodian and shall aim to register the ownership of the Fund's assets. Fund Manager Custodian Real Estate Investment Trust (REIT) SPV Assets 6
Fund Working Mechanism Investors Assets Units Ownership Distributions Real Estate Investment Trust (REIT) Properties Acquisition Rental Income 7
Fund Regulations as per CMA Fund Size Minimum of 100 Million Saudi Riyal Investors Limits Public ownership should not be less than 30% of the fund size and 50 investors. Public ownership does not apply to the following: Investor owning more than 5% of the fund size Fund Manager and related parties, including members of the Board of Directors Investment Limitations Investment in income-generating real estate should not be less than 75% Investment in projects under development or improvement does not exceed 25% Investment outside the Kingdom does not exceed 25% Leverage shall not exceed 50% of the value of the Fund's assets Distribution Shall not be less than 90% of net income 8
Fund Manager: Mulkia Gulf Real Estate REIT Fund Receiving Parties: 9
Fund Summary Number of assets Fund Size Fund Term 4 Assets 600 Million 99 Years SAR Average WALE Lease Expiry Sectors Allocation 5% 19% Less than 3 years Residential Industrial 76% Between 3 & 5 years More than 5 years Offices Retail 10
Assets Geographical Distribution West Avenue Mall Value: 309,000,000 Income: 24,720,000 % of total fund size: 52% Dinar Building Alteqnya Commercial and Industrial Complex Alyasmeen Residential Building Value: 124,470,490 Value: 121,500,000 Income: 9,957,640 Income: 10,029,000 Value: 18,677,820 Income: 1,450,000 % of total fund size: 20% % of total fund size: 3% % of total fund size: 21% 11
Fund Highlights Audit Fees RSM SAR 30,000 / Year Distribution of at least 90% of Net Income 99 Years Custodian Albilad Capitol 0.04% / Year 1% Management Fee Fund s T&C: Terms and conditions will be available through Mulkia: www.mulkia.com.sa, and Tadawul website: www.tadawul.com.sa Risks characteristics Investor s should read the Risks article on the terms & conditions. SAR 600 Million Minimum Targeted Rental Return 7% Financing fees: 1% of any financing arrangement for the fund Mulkia Gulf Real Estate REIT Structuring fees: 1% of any capital increase Dealing Fees: 1% of any purchase or sale of assets Shariah Compliant Fund Leverage of up to 50% of the fund s total assets Sharia Review Sharia Review Bureau SAR 33,000 / Year Fund purpose The fund aims to acquire already developed properties to achieve periodic rental income and distribute 90% of the net profits during the life of the Fund once a year. 12
Fund Strategies Maximize unit value and fund size Fund Size Tenants Capital Increase Diversified strategy Reputation Credit Worthiness Payment terms Use of debt instruments Locations with high population density Diversification of portfolio s sectors Lease contract improvement Maximize the size of the fund Maximize returns Reschedule of payments Competitive cost of debt Yield Periodic Increase Agreement duration Binding period 13
West Avenue Mall Location Type of Real Estate Commercial Complex-Retail Location Alfaisaliah District - Dammam Acquisition Value SAR 309,000,000 Tenant Gulf Real Estate company Tenant lease duration 20 years Project units Showrooms Land Area 57,000 SQM Build up Area 56,000 SQM Annual Rent SAR 24,720,000 Annual Yield 8% Occupancy Rate 100% Method of acquisition 86%- In kind, and 14% Cash 14
Alteqnya Commercial and Industrial Complex Location Type of Real Estate Location Commercial Industrial Alfaisaliah District - Riyadh Acquisition Value SAR 121,500,000 Tenant Tenant lease duration Project units Land Area Build up Area Alissa Automotive Company, Alissa Universal Motors, and United Motor Co. 5 years Land Blocks #6, 7, 9, 10, 11, and land plots 24 & 25 45,749 SQM 36,554 SQM Annual Rent SAR 10,029,000 Annual Yield 8.3% Occupancy Rate 100% Method of acquisition 100% - In Kind 15
King Abdulaziz Rd. Al Qadisyah Abi Bakr As Siddiq Rd. Alyasmeen Residential Building King Salman Rd. Location Type of Real Estate Location Residential Alyasmeen District - Riyadh Acquisition Value SAR 18,677,222 Tenant Tenant lease duration Project units Land Area Build up Area Al Marai Company 5 years 41 multi-sized apartments 2,309 SQM 5,303 SQM Annual Rent SAR 1,450,0000 Annual Yield 7.8% Occupancy Rate 100% Method of acquisition 100% - Cash 16
Dinar Commercial Building Location Batarji Rd. Type of Real Estate Commercial Offices Location Alzahra District - Jeddah Acquisition Value SAR 124,470,490 Tenant Saba Limited Company Tenant lease duration 7 years Project units Showrooms and offices Land Area 4,761 SQM Build up Area 14,900 SQM Annual Rent SAR 9,957,640 Annual Yield 8% Occupancy Rate 100% Method of acquisition 100% - Cash 17
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Important Notice Mulkia Investment Company and its affiliates and employees will invest in the Fund. The value of the investment in the fund or the unit price or income is subject to change and possible to fall and the investor may redeem amount less than invested capital. This document may not be suitable for all receipts, and each receipt is advised to consult professional financial advisor in case of doubt about this document. The value of the security may be subject to a sudden and large falls that may result in a loss equal to the amount invested, and that the loss of the investor may not be limited to the full amount invested or deposited originally. The income of the security may fluctuate and part of the invested capital may be used to pay that income. The investor in this fund during the initial offering period will pay a subscription fee of 2% of the subscription value, and the fees and charges mentioned in the terms and conditions will apply. The level of risk in this Fund is high, please refer to the Fund Terms and Conditions for further details on the related risks. To get a copy of the fund terms and conditions, please visit Mulkia Investment Company or through the company's website www.mulkia.com.sa 19
Contact us You can communicate with Mulkia at any time, our staff will be ready to respond to your questions or feedback to serve the best... Our Office is located in Saudi Arabia, Riyadh on following address 1. Main office: Prince Mohammed bin Abdul Aziz ( Tahlia Street ) - Aknaz Center - Building No. 184 - Office No. 3 - first floor PO Box 52775 postal Code 11573 2. Temporary office during Mulkia GULF REALESTATE Offering: Abu Bakr Al Siddiq Road, Al Narjis District - Al Narjs Commercial & Administrative Center 920003028 Email 20