KINGDOM OF SAUDI ARABIA REITS - Century 21 Saudi | CENTURY21 SAUDI The Reit Market Report The KSA’s stock market, Tadawul is currently hosting eight (8) listed REITs which are as

Research & Advisory Department

REITSM A R K E T R E P O R T

KINGDOM OFSAUDI ARABIA

2 | CENTURY21 SAUDI The Reit Market Report

Real Estate Investment Trusts (REITs) is a company that owns and operates income generating real estate assets.

REITs are a financial tool that allow pooling of investors funds for participation in real estate ownership.

It’s a way for investors to earn a share of the income generated through real estate assets without actually having to go and buy them. The income generating real estate assets owned by a REIT may include Residential, Commercial & Industrial Properties.

The key difference between REITs and other real estate companies is that a REIT must acquire and develop its real estate properties primarily to operate them as part of its own investment portfolio, as opposed to reselling those properties after they have been developed.

REITs - Introduction


The KSA’s stock market, Tadawul is currently hosting eight (8) listed REITs which are as follows:

• RIYAD REIT.• ALJAZIRA REIT.• JADWA REIT ALHARAMAIN.• TALEEM REIT.• AL MAATHER REIT.• MUSHARAKA REIT• MULKIA REIT.• AL MASHA’AR REIT.

REITs in KSA

REITs Listing Requirements

Fund Legal Type Closed – ended fund

Number of Investors Minimum 50 investors

*Initial Offer Minimum SAR 100 Million

Nominal Value per Unit SAR 10 per unit

Assets Ownership The assets must be registered under the name of third party (custodian)and owned by the unit holders

Distributions At least 90% of the fund’s net profits must be distributed annually to the unit holders

Leverage The borrowing of the fund’s must not exceed 50% of the total assets value of the fund

InvestmentAt least 75% of the fund's total assets value according to the last audited financial

statements must be invested in constructed developed real estate qualified to generate periodic and rental income

Vacant Lands The fund manager is prohibited from investing in vacant lands

Real Estate Development

The fund manager is allowed to invest up to a maximum of 25% of the fund’s total assets value according to the last audited financial statements in real estate development whether on real estates owned by the fund manager or not, and to

renovate or redevelop these properties

Real Estate Outside the Kingdom The fund manager shall not invest more than 25% of the fund’s total assets value according to the last audited financial statements in properties outside the Kingdom

*Public Ownership At least 30% of the total REIT units are owned by unit holders from the public

*Regulations Under-consideration by CMA• Public Ownership which is currently 30% of the total REIT units. This is under review to be increased to 50%.

• Minimum Initial Offer for the REIT must be at least SAR 100 million. This is under review to be raised to SAR 500 Million

*Note: The above two points are unofficial statements and for information only.


Structure of a REIT and its related Stakeholders


Yields and Listed REITs in KSA

Key Important Notes:

Yields Summary - Listed REITs

Listed REIT Asset ClassGross Rental

Yield

Gross Yield on Net Asset Value (NAV)

Net Dividend Yield

RIYAD REIT Office + Retail + Hospitality 7.01% 6.61% 2.06%

ALJAZIRA Mawten REIT Warehouses 8.43% 9.00% 1.26%

JADWA REIT ALHARAMAIN Hospitality + Retail 6.52% 5.92% 1.00%

TALEEM REIT Education 7.37% 6.31% 1.00%

AL Maather REIT Residential +Office + Retail + Warehouses 8.65% N/A N/A

MUSHARAKA REIT Residential + Warehouses + Hospitality 8.84% N/A N/A

Mulkia Gulf Real Estate REIT Residential +Industrial + Office + Retail 8.05% N/A N/A

Al Masha’ar REIT Hospitality + Retail 6.20% N/A N/A

• The calculations for both Net Dividend Yield and Gross Yield on NAV has been done using data published on Tawadwul Website.

• We have annualized the figures using the assumption that profits follow evenly throughout the year.

• There is no financial data published as yet for Al Maather, Musharaka, Mulkia and Al Masha’ar REIT as these were recently listed on Tadawul.

*Note: REITs are a new developing area in Kingdom of Saudi Arabia. Hence it is too pre-mature to benchmark a particular Yield to a

particular REIT. Once this sector develops further the market is more likely to see industry standard and benchmarks.

Limitations & Factors Affecting Yields

Type of Sector each asset belongs

Yields are directly linked to the different sector each asset belongs too.The overall weightage of REIT investment in a particular sector affects the portfolios overall

performance.

Type of Each Asset Class

Within each asset there are sub-classes or types. For Example in Residential sector generally the market is divided into two main types: Villas and Apartments. Now further in Apartments there are

sub-classes which will provide different returns and yields. So the choice of Asset in a REIT is directly related to the overall yields.

Comparing Apples & Oranges

The Yields on different REITs can not be directly compared as each REIT consists of different asset types and classes. Hence comparing their performance to each other might not be justifiable. The market seasonality affects the performance of a particular asset and hence its going to impact the

yield it will generate over a period of time.

Cost of the Assets in a REIT

The overall investment required in order to transform or develop a REIT is a crucial point that should be kept in mind when assessing the yields.

Location of Assets or properties in a REIT

The location in which Income generating assets are based in is an important consideration when it comes to yields. For example: a four-star Holiday Inn located in Riyadh will generate a different

income than the one located in Jeddah.


Listed REITs in KSA

RIYAD REIT

Listing Tadawul

Type close ended

Authroised Capital (SAR) 500,000,000

No. of Units 500,000,000

Paid Capital (SAR) 500,000,000

PAR Value per unit 10

Paid Up Value per unit 10

Investment Limits No Limits

Term 99 years

No. of Properties 5 + 1 (Under development)

Avg. portfolio Occupancy 93%

Asset ClassOfficeRetail

Hospitality

Portfolio value SR 500.3 Milion

Fund Manager Riyadh Capital

Custodian KASB Capital

RIYADH REIT Asset Portfolio - Summary

Property Name Type Acquisition Date LocationNet leasable Area (sqm)

ALTAMAYIZ CENTER Office + Retail August - 2015 Riyadh 6,416

IZDHAR CENTER Office + Retail December - 2015 Riyadh 4,410

ALFURSAN TOWERS Office + Retail March - 2016 Riyadh 8,055

ALSHATI TOWERS Office + Retail + Hospitality February - 2016 Dammam 13,356

ASCOTT Tahlia JEDDAH Retail + HospitalityAugust - 2016

Jeddah 14,300

**ASCOTT AL KHOBAR CORNICHE Office + Retail + Hospitality June - 2015 AlKhobar 24,453

**under construction and its expected completion in 2018

• Riyadh REIT got approval by CMA as public offering on 08/11/2016.

• The fund focuses on commercial sector which incudes assets falling under office, retail & hospitality.

• This REIT is the 6th largest fund to be listed on Tadawul with an authorized capital and paid-up capital of SAR 500,000,000.

500 MILL

ION

SR

Riyadh REIT is the 6th largest fund to be listed on Tadawul


Listed REITs in KSA

Market Performance

SAR 16.55 per unit**Recorded on 27/02/2017

Traded= 41,279,063**Recorded on 02/03/2017


Traded = 136,145**Recorded on 01/01/2017

Lowest Price

Lowest Volume

Highest Price

Highest Volume


Listed REITs in KSA

ALJAZIRA Mawten REIT

Listing Tadawul

Type close ended


No. of Units 11,800,000





Term 99 years

No. of Properties 1


Asset Class Warehouses

Portfolio value 118,000,000

Fund Manager AlJazirah Capital

Custodian Alinma Investment Company

ALJAZIRA Mawten REIT Asset Portfolio - Summary

Property Name Type Acquisition Date Location Net leasable Area (sqm)

AlKhumrah Warehouses Industrial n/a Jeddah 53,000

• ALJAZIRA Mawten REIT got approval by CMA as public offering on 02/01/2017.

• The fund focuses on Industrial sector which incudes assets falling under warehouses.

• This REIT is the smallest fund to be listed on Tadawul with an authorized capital and paid-up capital of SAR 118,000,000.


Market Performance





Lowest Price

Lowest Volume

Highest Price

Highest Volume

Listed REITs in KSA


Listed REITs in KSA

JADWA REIT ALHARAMAIN

Listing Tadawul

Type close ended


No. of Units 66,000,000





Term 99 years

No. of Properties 2

Avg. portfolio Occupancy seasonal

Asset Class HospitalityRetail

Portfolio value SAR 701 Million

Fund Manager Jadwa Investment Company

Custodian AlBilad Investment Company

JADWA REIT ALHARAMAIN Asset Portfolio - Summary

Property Name Type Acquisition Date Location BUA (sqm)No. of Rooms

Tharawt Al Andalusia Hotel Hospitality + Retail April - 2016 Makkah 7,573 294

Tharawat Al Taqwa Hotel Hospitality + Retail April - 2016 Makkah 32,901 690

• JADWA REIT ALHARAMAIN got approval by CMA as public offering on 27/03/2017.

• The fund focuses on Commercial sector which incudes assets falling under hospitality and retail.

• This REIT is the 2nd largest fund to be listed on Tadawul with an authorized capital and paid-up capital of SAR 660,000,000.


Market Performance





Lowest Price

Lowest Volume

Highest Price

Highest Volume

Listed REITs in KSA


Listed REITs in KSA

TALEEM REIT

Listing Tadawul

Type close ended


No. of Units 28,500,000





Term 99 years

No. of Properties 1


Asset Class Education

Portfolio value SAR 285,000,000

Fund Manager Saudi Fransi Capital

Custodian KASB Capital

TALEEM REIT Asset Portfolio - Summary

Property Name Type Acquisition Date LocationBUA

(sqm)

Al Tarbeah Al Islamiah School Limited Company Education n/a Riyadh 30,122

• TALEEM REIT got approval by CMA as public offering on 08/05/2017.

• The fund focuses on Education sector which incudes assets falling under school.



Market Performance





Lowest Price

Lowest Volume

Highest Price

Highest Volume

Listed REITs in KSA


Listed REITs in KSA

AL Maather REIT

Listing Tadawul

Type close ended


No. of Units 61,370,000





Term 99 years

No. of Properties 12


Asset Class

Residential

Office

Retail

Warehouse

Portfolio value SAR 613,700,000

Fund Manager Osool & Bakheet Investment Company

Custodian Saudi Kuwaiti financial House

• AL Maather REIT got approval by CMA as public offering on 12/06/2017

• The fund focuses on Residential, Commercial & Industrial sector which incudes assets falling under Residential Apartments, Office, Retail and Warehouses.

AL Maather REIT Asset Portfolio - Summary

Property Name Type Acquisition Date Location Plot Area

Al Maather Residential + Office + Retail n/a Riyadh 22,707.37

Al Rabie Office + Retail n/a Riyadh 8,589.53

Al Mohammadia Office + Retail n/a Riyadh 15,582.92

Al Tkahssusi Retail n/a Riyadh 6,610.61

Al Sahafa building 1 Office n/a Riyadh 11,340.00

Al Sahafa building 2 Retail n/a Riyadh 10,880.00

Hair warehouses Warehouses n/a Riyadh 11,970.00

Sulai warehouses Warehouses n/a Riyadh 46,158.00

Rabie Agreement Retail n/a Riyadh 1,413.26

Qudus Agreement Office + Retail n/a Riyadh 1,257.84

Wadi laban Agreement Residential + Retail n/a Riyadh 1,645.02

Dabbab Agreement Office + Retail n/a Riyadh 3,060.48

613MILLION

This REIT is the 3rd largest fund to be listed on Tadawul with an authorized capital and paid-up capital

SR

UP TO


Market Performance





Lowest Price

Lowest Volume

Highest Price

Highest Volume

Listed REITs in KSA


Listed REITs in KSA

MUSHARAKA REIT

Listing Tadawul

Type close ended


No. of Units 88,000,000





Term 99 years

No. of Properties 5


Asset Class

Residential

Industrial

Hospitality

Portfolio value SAR 872.4 Million

Fund Manager Musharaka Capital Company

Custodian Alinma Investment Co.

• MUSHARAKA REIT got approval by CMA as public offering on 12/07/2017.

• The fund focuses on Residential, Commercial & Industrial sector which incudes assets falling under Residential Compounds, Hospitality and Warehouses.

• This REIT is the largest fund to be listed on Tadawul with an authorized capital and paid-up capital of SAR 880,000,000.

AL Musharaka REIT Asset Portfolio - Summary

Property Name Type Acquisition Date Location BUA (sqm)

Ejzala Compound Residential n/a Al Khobar 29,486.73

Al-Baraka Warehouses Industrial n/a Riyadh 29,955.49

Radisson Blu Hotel Apartments Hospitality n/a Al Khobar 3,798.08

Seashore Residential Compound Residential n/a Al Khobar 38,121.50

Pearl Residential Compound Residential n/a Al Khobar 22,500.00


Market Performance




Traded = 1,357,874**Recorded on 10/10/2017

Lowest Price

Lowest Volume

Highest Price

Highest Volume

Listed REITs in KSA


Listed REITs in KSA

Mulkia Gulf Real Estate REIT

Listing Tadawul

Type close ended


No. of Units 60,000,000





Term 99 years

No. of Properties 4


Asset Class

Residential

Industrial

OfficeRetail

Portfolio value SAR 600 Million

Fund Manager Mulkia Investment Company

Custodian Albilad Capital

• Mulkia Gulf Real Estate REIT got approval by CMA as public offering on 09/08/2017

• The fund focuses on Residential, Commercial & Industrial sector which incudes assets falling under Residential Apartment Building, Industrial complex , Retail mall, showrooms & offices.


Mulkia Gulf Real Estate REIT Asset Portfolio - Summary


West Avenue Mall Retail n/a Dammam 56,000.00

Alteqnya Commercial and Industrial Complex Industrial n/a Riyadh 36,554.00

Alyasmeen Residential Building Residential n/a Al Khobar 5,303.00

Dinar Building Retail + Offices n/a Jeddah 14,900.00


Listed REITs in KSA

Al Masha’ar REIT

Listing Tadawul

Type close ended


No. of Units 57,240,000





Term 99 years

No. of Properties 3


Asset ClassHospitality

Retail

Portfolio value SAR 572.4 Million

Fund Manager Muscat Capital

Custodian NOMW Capital

• Al Masha’ar REIT got approval by CMA as public offering on 16/10/2017

• The fund focuses on Hospitality & Retail sector which incudes assets falling under Residential accommodation for pilgrims.


Al Masha’ar REIT Asset Portfolio - Summary


ESKAN Tower - 4 Hospitality + Retail n/a Makkah 18,053.00

ESKAN Tower - 5 Hospitality n/a Makkah 19,905.00

ESKAN Tower - 6 Hospitality + Retail n/a Makkah 15,314.00


In GCC the Listed REITs Market is in the growth stage. In the UAE there are currently two listed REITs on Nasdaq Dubai, the Emitates REIT and The ENBD REIT respectively.

Bahrain established the new laws related to REITs in November 2016 and the market witnessed the listing of its first REIT called Eskan REIT which listed on Bahrain Bourse. REITs structure is regulated by the Central Bank of Bahrain.

Saudi Arabia currently leads the market with officially eight (8) listed REITs on its stock market called the Tadawul. The country officially established the listed REITs legal framework in October 2016.

While the legal framework and regulations for trading of REITs on stock exchanges are not yet brought in by Kuwait and Qatar.

Listed REITs Outlook in GCC

GCC LISTED REITS – SUMMARY TABLE

CountryEmirates REIT ENBD REIT Eskan REIT

UAE UAE Bahrain

Listing Nasdaq Dubai Nasdaq Dubai Bahrain Bourse

No. of Properties 10 8 2

Portfolio

Index tower, Jebel Ali School, Le Grande,

Building 24, Office park,The Loft Offices, Indigo 7,

GMES World Academy,British Columbia Canadian

School

Binbhatti Terraces, Arabian Oryx House, AlThuraya tower

1, Burj Daman, Remraam Residential, Uniest, DHCC 25,

DHCC 49

Danaat Al Madina and Segaya Plaza

Occupancy 83% 86% 80%

Asset Class

Commercial 47.30% Office 67% Office

Education 38 .3% Residential 28% Retail

Retail 10.3% Alternative 10% Residential

Portfolio value USD 845 Million USD 352 Million USD 52.7 Million

Fund Manager Equitativa (Dubai) LimitedEmirates NBD Asset

Management LimitedEskan Bank B.S.C. (c)

Net Dividend 7.7% 7.1% 6%

*Note: The data contained in the above table is sourced from Emirates REIT, ENBD REIT and Bahrain Bourse website.


DisclaimerIn order to prepare this report, Century21 Saudi research team collected the data from outside sources. Century21 Saudi is

confident about the reliability of published data. However, we do not guarantee the completeness and accuracy of the data. This

report is prepared for information only. The assessments and values articulated in this report are subject to change without any

notice. Therefore, no investment decision should be made based on the information presented in this report. Century21 Saudi

will not be responsible for any loss that may be sustained as a result of the information enclosed in this report.

Past performance is not a guarantee of future returns. The value of units, the income from them, the prices and currencies of

the funds, can go down as well as up. Investors may get back less than he or she originally invested. Additionally fees shall apply

on the fund. Changes in currency rates may have an adverse effect on the value, price or income of the security. To ensure proper

understanding of the fund and its suitability for you according to your risk tolerance, we recommend that you seek a specialized

investment advisor.

The data contained in this research is sourced from Tadawul and Capital Market Authority, unless otherwise stated. It is not the

intention of the article to be used or deemed as recommendation, option or advice for any action(s) that may take place in future.

ContactsFor Assistance in development & marketing decisions please contact:

Asif Iqbal

Head of Research and Advisory

[email protected]

Mobile: 0555 177 076

Muath A. Alsaawi

Marketing Manager

[email protected]

Mobile: 055 4000 134

Al Waleed Hamd Binzouman

General Manager

[email protected]

Mobile: 0555 194 919

About Century21®

Century21® is one of the most recognized name in Real Estate Market with approximately 7,600 independently owned and operated franchised brokerage offices in 71 countries and territories worldwide and represented by more than 112,000 real estate experts.

Century21 Saudi is official representative of Century21® in the Kingdom of Saudi Arabia since 2005; specialized in Real Estate Evaluation (Appraisal), Marketing and Leasing Services, Real Estate Research & Advisory and Property Management.

Century21 Saudi’s Research & Advisory Department (CRA) has been established in 2009 and has a proven track record of providing a variety of research-based services to the business arena all over KSA market.

Services Equipped with highly qualified analysts & researchers, Century21 Saudi is capable of responding all major segments of Real Estate market (Residential, Commercial, Industrial and Hospitality) with professional decorum.

Our offered services are:• Feasibility Studies• Highest and Best Use Studies• Strategy & Planning Advisory• Pricing Strategies• Market Research Analysis Studies• Development Solutions• Site Assessment• Market Forecast• Real Estate Market Review

Naveed Iqbal

Senior Consultant

[email protected]

Mobile: 0530763063

Documents

KINGDOM OF SAUDI ARABIA REITS - Century 21 Saudi | CENTURY21 SAUDI The Reit Market Report The KSA’s stock market, Tadawul is currently hosting eight (8) listed REITs which are as