Riyad Reit Invests SR 233 mln in Logistics Portfolio in US

Riyadh Capital (“Fund Manager”) announced that Riyadh REIT has invested SR 233 million in a U.S. Logistics portfolio consisting of five high-quality income generating properties of newly built, Class A logistics.

Properties are leased to high quality tenants with a weighted average term of 15.5 years in four different locations (St. Louis – Missouri, Houston- Texas, Greenville/Spartanburg – South Carolina, Birmingham-Alabama).

It is worth mentioning that the properties were newly developed to suit the logistics services and with a built-to-suit rental structure where the total real estate assets area is more than 4.5 million square feet in the south-eastern United States of America.

 The area is one of the most developed regions in the United States of America and is recognized as a specialized industrial and logistical centre.

It is noteworthy that the lease contracts extend for a period of 15 years, subject to renewal, for three main tenants, and they are as follows:

‒ Amazon (S&P A-, Fortune 500 (no. 2) company, $1.67 trillion market cap

‒ Lowe’s (S&P BBB+, Fortune 500 (no. 44), $149 billion market cap), and

‒ Techtronic Industries (one of the largest global power tools companies with a market cap of $32.8 billion(.

Logistics is one of the strongest real estate asset classes with significant level of institutional capital pursuing the asset class.

The investment is part of the Fund’s capital increase process by issuing new shares, and has been funded entirely through the available shariah-compliant short-term debt facility for Riyadh REIT. The facilities will be repaid after the capital raising process is complete.

The investment is expected to generate an average annual yield of 7.5% to Riyad REIT over a 4-year investment period.