Middle East Financial Investment Company - MEFIC REIT

MEFIC REIT

About MEFIC REIT

“MEFIC REIT” fund is a shariah-compliant close-ended traded real estate investment fund to be listed on the Saudi Capital Market (Tadawul). The fund, which is licensed by the Capital Market Authority, secured the approval for its public offering on 26/3/2018G corresponding to 9/7/1439H. MEFIC REIT is one of the largest listed REITs in Tadawul with a fund size of SAR1.23bn distributed over 123 million units. MEFIC REIT’s portfolio composed of 8 properties distributed in three main cities in KSA (Riyadh, Jeddah and Makkah) in addition to Dubai in UAE.

MEFIC REIT is the only listed REIT that provides a committed minimum return to its subscribers in KSA. We highlight that 6 properties (out of 8) in MEFIC REIT are leased through binding guaranteed triple net lease contracts to master tenants for 4 years, which will reduce the operational and rents collection risks. Moreover, MEFIC REIT is one of the most diversified listed REITs in term of geographic locations and sectors coverage (Residential, Retail, Office, and Hospitality).

Fund Objective

MEFIC REIT aims to generate income on the invested capital by acquiring a number of recurring income-generating real estate assets in KSA and GCC.

More focus on the advantage of “Committed Minimum Return”

MEFIC REIT aims to provide a return of 7.5% in 2018 with expectation to reach 7.9% in 2021. In addition to this, MEFIC REIT intends to provide a minimum threshold return of 5% (floor). In a situation where the return falls below the minimum threshold, MEFIC Capital, as the REIT’s manager would infuse to a maximum extent of 2% (commitment), thereby aiming to bring the return to 5% for a period of 8 years.

MEFIC REIT Facts

Fund Name

MEFIC REIT fund

Fund Manager

Middle East Financial Investment Company (MEFIC Capital)

Fund Currency

Saudi Riyal (SAR)

Fund Duration

99 years

Fund Size

SAR1,230mn, distributed over 123 million units

Offering size

SAR879.5mn, distributed over 87.95 million units

Subscription period

4 April 2018 to 15 May 2018

Offer price

SAR10/unit

Subscription fees

2% of subscription amount

Qualified investors 

Considering the rules governing the ownership of properties by non-Saudis, subscription into “MEFIC REIT” is available for the following: -

        -  Natural persons who are the citizens of Saudi Arabia.

        - Companies, institutions, investment funds, and other legal entities that are 100% owned by Saudis.

Minimum subscription

50 units which is equal to SAR 500

Maximum subscription

6,149,950 units which is equal to SAR 61,499,500

Receiving banks

MEFIC Capital, Al Rajhi Bank, NCB, Riyadh Bank, Banque Saudi Fransi and Aljazira Capital

Initial gross yield on fund size

7.97%

Initial net yield on fund size

7.5%

Profit distribution

Semi-Annual distribution of at least 90% of the fund’s net profit

MEFIC REIT Properties

Please refer to the full Terms & Conditions

 

Disclaimer

The Fund Investment value is volatile -not fixed-, the investment value may increase or decrease, moreover, the fund investment value and/or the unit prices and/or income may witness a decrease in value, as a result the Investor may receive a lower amount than the principle invested amount. Please refer back and read the Fund Terms and Conditions in general and practically the related information concern performance fess and risks that associated when investing at the Fund. If you have any doubt about the suitability of this instrument/investment to you, consult your investment counselor. 

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