Riyad Capital, the investment arm of Riyad Bank, has revealed that its Shariah-compliant real estate investment fund, Riyad REIT has invested $62 million in its US logistics portfolio consisting of five logistics properties.
The properties, which are 100 percent leased with a weighted average term of 15.5 years, are newly developed, built-to-suit logistics totaling over 4.5 million square feet across the Southeast US, the fastest-growing region in the country that is recognized as an industrial and logistics hub, Riyad Capital said in a statement on Tadawul.
The portfolio consists of five high-quality income-generating properties in four different locations of the US including St. Louis – Missouri, Houston – Texas, Greenville/Spartanburg – South Carolina, Birmingham-Alabama.
The 15.5 years leases are given to three strong tenants including the American eCommerce giant, Amazon, US-based retail company specializing in home improvement, Lowe’s, and Hong Kong-headquartered electronics company, Techtronic Industries.
Logistics is considered one of the strongest real estate asset classes with a significant level of institutional capital pursuing the asset class. The investment is expected to generate an average annual yield of 7.5 percent to Riyad REIT over a 4-year investment period.
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 Riyad REIT. The facilities will be repaid after the capital-raising process is complete.
Riyad REIT
Riyad REIT is a closed-ended Shariah-compliant real estate investment traded fund. It acquires, maintains, owns, and develops a portfolio of income-producing real estate assets. The primary investment objective of the REIT is to provide unitholders with current income by investing in income-producing real estate assets in Saudi Arabia.
