Al-Khabeer REIT Fund's returns of 9 percent per annum are considered among the highest rates in comparison with other real estate investment trade funds listed on the Saudi Stock Exchange (Tadawul), announced al-Khabeer Capital CEO Ahmed Saud Ghouth.
He added that Khabeer REIT invests in seven diversified real estate assets distributed in distinct locations in Riyadh, Jeddah and Tabuk.
Ghouth pointed out that the Fund is distinct from other funds offered in the Saudi market because it is in full conformity with the interests of both the Fund Manager and investors in terms of efficiency of collection of rents.
In all funds offered, the Manager deducts management fees based on the size of the Fund regardless of the efficiency of collection, however, in Khabeer REIT management fees are deducted from the rent received. It is the only fund in Saudi Arabia whose manager does not receive any administrative fees before rent collection.
He also explained that the Fund is characterized with the diversified assets in which it invests, and its contracts with an average lease period of 10 years backed by strong guarantees. He added that subscribing to the Fund is an easy process via 22 channels offered through 6 financial institutions.
The Fund focuses on two key elements: the asset quality and the added value that the financial expert will provide to investors, according to Ghouth.
“Thus, we have reached the 9 percent returns that investors look for in this type of risk, while previous funds have offered returns between 6 percent and 7 percent. The market subsequently proved that these returns are not in line with the nature of risk, from the investors' point of view.”
He stressed the importance of REIT Funds for the Saudi economy, especially in light of the low saving rates, which are one of the challenges facing plans and initiatives related to the development of the financial sector.
Studies showed that the Kingdom recorded a savings rate of about 4.2 percent of the available annual income, whereas the global rate reaches 10 percent.
The CEO indicated that current real estate investment funds cannot meet the aspirations of all possible investors in this type of fund, especially that their size combined does not exceed SR12.1 billion.
REIT funds’ average size in Tadawul does not exceed 0.6 percent, which is considered a low level compared to global rates of 2.1 percent, which Gouth said needs to be increased to meet goals.
