Announcement from Musharaka Capital Company regarding a development occurring on Musharaka REIT Fund
Musharaka Capital as the Fund Manager for Musharaka REIT fund announce the commencement of the fund’s acquisition procedures for a new property located in the United Arab Emirates in Dubai, with a total value of 46,000,000 AED (Forty six million AED), the price was decided after the fund has obtained evaluations from two independent real estate accredited valuers. The target property is one of the largest self-storage facilities in the Middle East, as it is a fully equipped building for the purposes of self-storage services with international standards, the target property is distinguished by its strategic location overlooking Sheikh Zayed Road and the quality of the user of the property, where the property will be re-leased to the current tenant “The Box Self Storage Services Company“.
The lease contract is distinguished by a long-term period that extends to 25 binding years under bank checks, and the annual rental value starts at 4,000,000 AED (four million AED) with 10% increase in rental value every five years. Below is a summary of the property and transaction details:
Country: United Arab Emirates
Land area: 5,378.26 square meters
Building area: 13,860 square meters
Lease area: 9,732 square meters
Acquisition value: 46,000,000 AED
Net annual income: 4,000,000 AED
Contract Duration: 25 binding years, extendable for an additional five years
Guarantees: 48 bank checks with the total rental value for the entire period of the binding contract
Age of the property: The property is new
Location: The property is in the Emirate of Dubai, Jebel Ali First District overlooks Sheikh Zayed Road
Tenant: The Box Self Storage Services Company
The purpose of the lease: to use the property for self-storage services activity
About the tenant: www.theboxme.com
It is expected to transfer ownership of the property after the administrative and legal procedures for the regulatory authorities in the United Arab Emirates will be completed, and it will be within 90 days from the date of this announcement.
This transaction will be funded through the bank facilities available to the fund, which are in line with the standards of the Shariah Board. And the fund manager would like to clarify that the financial impact after completing the acquisition will be to increase the fund’s revenue and reduce the risk of lower rental income. Also, the long tenure of the lease contract will have a positive impact on increasing annual cash savings for the fund.