Al-Rajhi Capital (ARC) has announced the successful conclusion of the initial public offering (IPO) of the Al-Rajhi REIT Fund. Apart from being the first REIT IPO in 2018, Al-Rajhi’s REIT is also the largest REIT fund to be offered to date in the Kingdom. The fund has a size of SR1.62 billion ($282 million), of which about SR427 million were offered in the IPO (42.7 million units at a par value of SR10) during Jan. 1 to Jan. 14.
Al-Rajhi REIT fund was oversubscribed at 174 percent and raised SR740 million, reaching new heights in terms of number of subscribers from the general public with 90,561 individual and institutional subscribers participating in the IPO.
In accordance with the terms and conditions of the fund, each subscriber will be allocated a minimum of 100 units, and the remaining units will be allocated on a pro-rata basis to those who have subscribed for more than the minimum 100 units at a rate of 52 percent. Refund of excess funds will be within five business days from the IPO closing date.
Gaurav Shah, CEO of Al-Rajhi Capital, said: “We are pleased to announce the successful closing of Al-Rajhi REIT IPO with record subscriber participation. This milestone supports our aim to broaden the retail investor base by achieving greater inclusion in investment products such as REITs. The investor acceptance of our REIT reinforces that ARC’s robust real estate investment process has resonated well with investors. We will continue to focus on real estate assets with long-term fixed contracts occupied by solid tenants in attractive sectors to deliver predictable returns in the years to come.”
Al-Rajhi REIT Fund aims to ensure a sustainable income stream for investors over the medium- to long-term from its high-quality portfolio of diversified income generating assets. The proceeds from the initial public offering will be used to acquire new assets to further expand the REIT Fund’s investment portfolio. Al-Rajhi Capital has around 10 percent ownership in Al-Rajhi REIT Fund post the IPO, and the company has voluntarily committed not to sell any units for the next two years post listing.