Riyad Capital announced in alliance with Naif Al-Rajhi Investment Company the closure of subscriptions in the private placement of Riyad Real Estate Income Fund, after raising the target capital for the fund at SAR 500 million ahead of schedule.
‘Riyad Real Estate Income Fund’, the latest Shariah compliant investment product offered to Riyad Capital’s clients, is the first of its kind. The fund has an open-ended capital of 20 years with the possibility of extension.
The fund will invest in income generating real estate projects, including showrooms, office spaces, residential compounds as well as other profitable investments that enable the fund manager to distribute sizeable annual dividends.
In support of the fund’s objectives and success, Riyad Capital entered into a strategic alliance agreement with Naif Al-Rajhi Investment Company, in cooperation with Memar Development and Construction Company to establish “Erad Real Estate Development Company”. Erad will render real estate development and project management services for Riyad Real Estate Income Fund.
The CEO of Riyad Capital, Mr. Ali AlGwaiz, described the move as a step forward within the company’s strategy of offering unique investment products with added values, while carefully and responsibly providing the required resources for its success.
Hence, it was important to enter this alliance with a vast array of experience and specialisations in developing and managing successful real estate projects.
Mr. Naif Saleh Al-Rajhi, CEO of Naif Al-Rajhi Investment Company, explained that this alliance holds the main elements of the real estate market in an organized structure (Or: in the form or regulated companies) which enjoys a variety of expertise in the fields of planning, finance, development and management.
In summary, the fund strategy is to acquire high quality income generating real estate assets, and to develop and operate new real estate projects as part of the fund’s income-generating portfolio. It is worth noting that the fund strategy comprises of geographical diversity covering a number of cities in the Kingdom. Starting with Riyadh, the Eastern Province, Jeddah and a number of other promising cities, as well as multi sector diversity such as commercial, hospitality, residential, office and other sectors within these cities depending on the business attractiveness which can vary based on location.
Erad Real Estate Development Company was established to execute strategic plans and projects for “Riyad Real Estate Income Fund”, which has an extendable duration of 20 years. Phase one will cover the development and acquisition of a number of residential and commercial projects covering over 200,000 Square meters of lands in the cities of Riyadh and Khobar, to be followed in later phases by a number of other projects in different cities and locations.