Announcements
Jadwa Investment Announces a Material Development to Jadwa REIT Al Haramain Fund
Mon, 20 April 2020
Description of the event:
Jadwa Investment Company announces the temporary suspension of management fees for Jadwa REIT Al Haramain Fund, which equals to 1% of the net asset value of the Fund, due to the direct impact of the coronavirus (COVID-19) outbreak on the Fund’s assets. Specifically, the precautionary COVID-19 measures included the suspension of Umrah, which led to the suspension of the Fund’s rents. The suspension of management fees will be effective from the date of rent suspension for tenants, corresponding to March 1, 2020, and until the Fund resumes the collection of any rents.
It is worth noting that the Fund has good levels of liquidity, supported by the Fund manager’s decision to reduce the cash dividends for the second half of 2019 in response of such circumstances. In addition, the decline in the cost of financing (linked to SIBOR) has contributed to reducing the severity of the expected negative impact.
The Fund manager will continuously monitor the market and assess opportunities to acquire additional, accretive income-generating properties given the Fund’s low level of leverage at 21% of total fund assets as of the latest audited financial statements.
The Impact Caused by the Event:
The suspension of management fees will mitigate the expected negative impact on the fund.
The fund manager will also monitor the situation closely and announce any future material developments.