Subsequent to the announcement by Saudi Economic and Development Securities Company (SEDCO Capital) that was published on 20/04/2020 regarding material development to SEDCO Capital REIT Fund Related to the Fundamental Effects of Precautionary Measures to Face the COVID-19 Pandemic, in which the Fund Manager has received several requests from multiple tenants to suspend rent payments and/or to temporarily reduce due rent payments as a result of the latest developments associated with the COVID-19 pandemic. SEDCO Capital, in its capacity as the Fund Manager of SEDCO Capital REIT Fund, wishes to disclose and clarify the details of additional requests received and how it will manage them until the date of this announcement. In addition, the Fund Manager confirms to all investors that it is dealing with these requests in a manner that protects the interests of both unitholders and tenants.

 

To date, the total value of additional requests received from tenants for a temporary reduction of their contractual obligations and/or suspension of rental values, represents approximately 2.7% of the Fund’s total annual rental income (“total income”). The Fund Manager declined requests equivalent to 0.9% of total income. Therefore, the total value of requests received from tenants affected by the precautionary measures is approximately 1.8% of the total income, noting that the Fund Manager has not received any contract termination requests.

 

Thus, the percentage of total requests received to consider a temporary reduction of tenant’s contractual obligations and/or suspension of rental to date becomes approximately 17.2% of the fund’s total annual rental income (“total income”), where the total declined requests amounted to 5.6%. Requests received from tenants affected by the precautionary measures amounted to 11.1%. And, 0.5% of total requests have been dealt with according to what was clarified in the explanatory announcement issued on 04/20/2020.

 

As for the additional requests received, the fund manager has taken the following actions:

  1. Requests from tenants excluded from precautionary measures have been declined and tenants have been notified accordingly.
  2. Tenants affected by the precautionary measures have been notified that the impact of these actions and the amount of actual damage, if any, will be assessed on a case-by-case basis, by the end of this pandemic and resuming commercial activities while maintaining the interests of all parties, and in accordance with the regulations enforced in Saudi Arabia.
  3. The Fund Manager will follow the same procedure with any upcoming requests.

 

 

The Fund Manager clarifies that the values illustrated in this announcement do not consider any other future requests nor other unforeseen developments. Concerning the impact on the dividends, the Fund Manager aims to maintain a stable distribution of cash dividends as mentioned in the Fund’s terms and conditions depending on the ability to collect the full amount of due rents. Not to mention, that the implications of the precautionary measures are continuing and the actual financial impact on the Fund’s distributions cannot be assessed until the time of their due dates.

 

The Fund Manager is constantly monitoring the situation and will announce on any further material development in relation to this matter.