MEFIC Capital, the fund manager of MEFIC REIT Fund, has announced agreements to acquire two properties in Jeddah and Makkah with a combined value of SAR 815 million, while also extending a memorandum of understanding to assess a potential usufruct right over an additional property in Jazan. The transactions, signed on March 13, mark a significant portfolio expansion for one of Saudi Arabia’s listed real estate investment trusts.
Two Major Property Transactions
The first agreement covers the acquisition of a property in Jeddah spanning 66,600 square metres at a price of SAR 460 million. The consideration is structured as an in-kind payment, and completion of the transaction is expected within 90 business days, subject to conditions including an increase in the fund’s total assets through the issuance of additional units via in-kind contributions. This increase requires the approval of MEFIC Capital’s board of directors, the Capital Market Authority (CMA), and the fund’s unitholders.
The second agreement involves land in Makkah, totalling 36,000 square metres and designated for development, priced at SAR 355 million — also to be settled in kind. This transaction carries the same 90-business-day completion window and similar conditions, including legal, technical, and financial due diligence requirements and the completion of all necessary licensing and regulatory certifications.
Jazan MoU Extended
Alongside the two acquisitions, MEFIC Capital has renewed a memorandum of understanding concerning a usufruct right over a property in the Jazan region for 60 business days. This extension keeps alive the fund’s interest in a third strategic location in Saudi Arabia’s southern economic corridor, which has seen significant infrastructure investment as part of the Jazan Economic City and surrounding development projects.
Saudi REITs and the Real Estate Investment Landscape
Saudi Arabia’s REIT sector has expanded significantly since the Capital Market Authority introduced the regulatory framework for listed real estate investment trusts in 2016. MEFIC REIT is one of several funds listed on Tadawul that invest in income-generating commercial, retail, and hospitality properties across the Kingdom. Acquiring assets in Jeddah — Saudi Arabia’s commercial capital and second-largest city — and Makkah, the world’s holiest city and a destination that attracts millions of visitors annually, reflects the fund’s strategy of targeting high-footfall, high-demand locations with strong long-term rental income potential.
The transactions also reflect growing investor confidence in Saudi Arabia’s real estate sector, which continues to benefit from population growth, rising demand for commercial space, and significant public and private investment in urban development under Vision 2030.
