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Middle East Financial Investment Company (MEFIC Capital), the fund manager of MEFIC REIT Fund, has revised three conditional memoranda of understanding (MoUs) related to the potential acquisition of properties in Jeddah and Makkah, while extending negotiations for a usufruct right in Jazan. Key amendments include changing the payment structure for the Jeddah property from in-kind to a mix of cash and in-kind, extending deadlines for both Jeddah and Makkah properties to October 22, and prolonging the Jazan MoU by 90 business days. These changes are contingent on full subscription to a cash unit offering, which could delay finalization. The fund manager anticipates these transactions will boost the fund's total asset value.
The revisions signal the fund's strategic focus on real estate expansion in key Saudi regions, aligning with Vision 2030's economic diversification goals. For traders, the amendments may affect investor sentiment toward real estate investment trusts (REITs) in the Gulf, particularly as the fund's performance could influence broader market confidence in Saudi equity assets. The conditional nature of the deals, however, introduces uncertainty, as delays or subscription hurdles could impact timelines.
Market participants should monitor the fund's progress in securing financing for the cash component and the finalization of the Jazan usufruct agreement. Completion of these acquisitions could enhance the fund's portfolio diversification and yield potential, attracting both local and international investors. Additionally, the Saudi real estate sector's performance remains a critical factor for the fund's long-term success.
