Real Estate Sector
AlAhli REIT Fund (1)
HIGH QUALITY AND SUSTAINABLE INCOME FOR INVESTORS
AlAhli REIT Fund (1) is a closed-ended Shariah-compliant real estate investment traded fund. Its objective is to provide regular rental income to investors and to enhance the long-term value of the fund by investing in income-generating properties.
The fund’s portfolio consists of high-quality assets including a mega mall, a 5-star hotel and two grade A office buildings located in prime locations. Underpinned by the quality of assets and the underlying structure, the fund won the “Best Islamic REIT of the year” award from Global Business Outlook, a UK-based publication.
The fund has been included in “FTSE EPRA Nareit Global Real Estate Index”, an index that allows investors to identify real estate companies with strong sustainability performance. The said inclusion in the index brings the fund under the radar of international investors.
The fund has been registered for zakat that will make the investment in the fund deductible from zakat base. This makes it more attractive for institutional investors to invest in the fund. Only a few REITs have registered for zakat in the Kingdom of Saudi Arabia so far.
There is an opportunity for the fund to enhance returns for the investors further through the acquisition of high-quality assets both locally and internationally that will be funded by SAR 89 million financing facility available from the National Commercial Bank.
REIT is an attractive vehicle for the investors who wish to invest in the real estate sector but at the same time is looking for liquidity and transparency. REITs are contributing to the goals of the Kingdom of Saudi Arabia’s Financial Sector Development Program, a key facet of Vision 2030 that aims to build a diversified and effective financial sector to support the development of the national economy.
The fund is managed by NCB Capital, the largest asset manager in the Kingdom of Saudi Arabia and the largest Shariah-compliant asset manager globally with over SAR 190 billion of assets under management.
NCB Capital, the largest asset manager in the Kingdom of Saudi Arabia
SAR 190 bn Total assets under management
Much of the success of the fund can be attributed to the assets which underpin it. All the properties in the fund, such as Alandalus Mall, Alandalus Mall Hotel, Salma Tower, and the newly acquired Qbic Plaza, are situated in prime locations. They all enjoy easy accessibility; they are very close to the city center and are within densely populated, lively districts.
The fund itself is managed by experienced professionals at NCB Capital – the largest asset manager in the Kingdom of Saudi Arabia and the largest Shariah- compliant asset manager globally, with over 190 billion Saudi Riyals of assets under management.
The fund has been recently included in the FTSE EPRA Nareit Global Real Estate Index Series. It is designed to represent general trends in eligible real estate equities worldwide. Relevant activities are defined as the ownership, trading, and development of income-producing real estate. The fund's inclusion in the index increases its demand from global investors.
These strong foundations that form the backbone of the fund are reflected in the confidence expressed in the confidence of institutional investors – such as companies, endowments, and other institutions who represent more than 75% of all investors in the fund.