Sedco Capital pours $126M into Saudi real estate

Published October 10th, 2016 - 09:00 GMT
The major buys of Sedco include an anchored standalone Hyper Panda retail store in Dammam. (
The major buys of Sedco include an anchored standalone Hyper Panda retail store in Dammam. (

Sedco Capital, a leading Saudi licensed asset manager, said it has acquired seven quality properties across the kingdom on behalf of its second real estate income fund for SR473 million ($126 million) over the past 19 months.

The Sedco Capital Real Estate Income Fund II is a Shariah-compliant, close-ended investment fund established in the kingdom under Article 4-B-4 of the Investment Funds Regulations and managed by Sedco Capital as the fund manager.

Its objective is to invest in high quality income generating real estate assets in the main cities of Saudi Arabia and provide investors with a cash income with the possibility of a capital increase through these real estate assets.

The major buys of Sedco include an anchored standalone Hyper Panda retail store in Dammam as well as the adjacent land used for parking, Olya School in Riyadh, Dar Al Baraa School in Riyadh, an anchored standalone Extra store in Dammam, Alhamra Plaza retail strip outlet in Riyadh and Irgah Plaza retail strip outlet in Riyadh, said a statement from the Saudi firm.

The acquisition of these properties by Sedco has bolstered the firm's realty portfolio in Saudi Arabia.

The acquisitions collectively total SR473 million ($126 million) in purchase price for approximately 88,000 sq m of built-up area across Riyadh and Dammam. This portfolio of assets benefits from a weighted average lease expiry of 16 years to credible and investment grade tenants, it stated.

On the acquisition, CEO Hasan Al Jabri said: "Over the past five years, the Sedco Capital Core/Core Plus real estate strategy has demonstrated an impressive track record of adding value for its clients. Responding to increased demand from investors for commercial real estate investment opportunities, Sedco Capital launched SCREIF II on November 13, 2014 and has steadily added to its holdings, accumulating a well-diversified portfolio."

He pointed out that the success of the past five years had also led to the notable growth of the Sedco Capital team, which now boasts four highly experienced members in real estate investment and asset management.

"Our total assets under management have reached the $5.2 billion mark, a testament to the confidence our clients have placed in our team and our approach," remarked Al Jabri.

Sedco Capital's real estate portfolio in Saudi Arabia, he stated, has grown to include 15 assets under its two real estate income funds (SCREIF I and II) with a portfolio value exceeding SR1.1 billion ($293 million).

Sherif Selim, the head of Mena Real Estate at Sedco Capital, said: "We have acquired two different types of properties being retail and education for SCREIF II that met our criteria of being stable, defensive, well located and income-producing."

"We have a healthy pipeline of assets that are either defensive by nature or structured defensively and we look forward to the deals we will close in the last three months of the year," he stated.

Selim said the company had identified the Saudi real estate market in particular, as an attractive asset class for investors and its dedicated team now offers funds, separate accounts and syndicated transactions across the full spectrum of real estate strategies.

The team is also continuously looking for opportunities to deliver to investors attractive risk adjusted returns, he added.

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