Derayah REIT fund completes leasing of Riyadh hotel tower

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Derayah REIT, a shariah-compliant closed-end real estate investment fund based in Saudi Arabia, has announced that its fund manager - Derayah Financial - has completed the leasing of its hotel development located in Riyadh to a master tenant.

A key property of Derayah Financial, the hotel tower is located within AlOlaya district in Riyadh.

The lease term is for 15 years with a grace period of 12 months, said Derayah REIT in its filing to Saudi bourse Tadawul.

The rent, which starts at SAR5.5 million ($1.5 million) onwards can then escalate to SAR7.5 million ($2 million) over the lease term, it stated.

With the average annual rent of the prime facility set at SAR6.5 million, Derayah REIT said the occupancy rate of the fund's properties is set to increase.

The financial impact of the transaction is expected to be generally positive, which will be reflected in the Fund's results during the second half of 2024, it added.