Sedco offering to increase REIT fund by $187 million

DUBAI: Saudi Arabia-based asset management firm Sedco Capital has launched an additional offering of its real estate investment trust fund to increase asset value by SR702 million ($187 million), Arab News reported.

The offering period will run for five days until December 16, the company said in a statement. The price is set at SR10/unit.

Sedco Capital wants to increase the total asset value of the fund, as well as raise additional equity up to SR575 million, consisting of 32.5 million units of in-kind subscription and 23 million units for the cash subscription.

Upon completion, the fund’s size will increase by 64 per cent to reach a total value of SR1.8 billion.

The proceeds will be used to acquire and settle related transaction costs for the company’s investment portfolio, including eight properties in the education and commercial sectors across Riyadh and Dammam.

“We believe that the portfolio is well-positioned to benefit from the overall growth of the Saudi real estate industry. This is driven mainly by the Kingdom’s youthful demographics, increased demand for higher-quality education, and supportive government initiatives for economic transformation,” Safer Abu Aker, CEO of Sedco Capital, said.

The properties are expected to generate gross rental income of SR49.4 million annually, a yield of 7.5 per cent.

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