Aman REIF (under formation) — the Sultanate’s first Real Estate Investment Trust or Fund (REIT) which is due to open for public subscription in the first week of January, plans to invest part of the proceeds in a real estate light industry asset under development at Halban just outside Muscat Governorate.
The asset in question is the Madinat Sandan project, billed as the country’s first integrated light industrial city currently being developed by private investors just off Batinah Expressway near Halban in Nakhal Wilayat. The project is being marketed as a one-stop city for industrial and commercial markets associated with the automotive and construction sectors. When fully built out on a 250,000 sq metre area, the integrated city will feature 2,400 shops, 400 offices and 1,800 residential units with a a total built up area of 320,000 sq metres.
According to Aman REIF’s prospectus for the Initial Public Offering (IPO), which launches on January 2, 2020, the Fund will invest in a sizable chunk of Madinat Sandan’s Phase 1 assets. As a result of this proposed investment, the Fund will own 708 units (comprising 269 shops, seven car showrooms and 432 apartments), representing 26.6 per cent of Phase 1 of the project. (The balance 73.4 per cent of Phase 1 has already been sold to different investors.)
Aman REIF plans to offer for subscription a total 200 million units with a value of 100 baisas per unit, representing 100 per cent of the Fund’s total issued capital on the completion of the IPO. Of this total, 100 million shares will be offered through a public offering with a value of 100 baisas per unit, representing 50 per cent of the Fund’s total issued capital. The remaining 100 million units with a value of 100 baisas per unit will be offered to the developers of Madinat Sandan (as a private offer) at an offer price of 100 baisas per unit.
Explaining the business model behind its planned investment, Aman REIF said in its prospectus: “Up to a maximum of RO 10,000,000 of the proceeds of the Public Offer received by the Fund shall be paid to Sandan under the terms of the Master Sale and Purchase Agreement. The purchase price payable by the Fund to Sandan under the Master Sale and Purchase Agreement will be RO 20,000,000. The balance of the Fund’s purchase price payment obligations to Sandan under the Master Sale and Purchase Agreement will be satisfied by the issuance of Units in the Fund which will take the form of the issuance of 100,000,000 Units at a value of 100 baisas per Unit and if the Public Offer is not fully subscribed then the balance of units that are not subscribed for as part of the Public Offer will be issued to Sandan at a value of 100 baisas per Unit and the cash consideration will be reduced accordingly on a pro-rata basis.”
The Public Offer will run from January 2–16, 2020. It will be open to Omani and non-Omani individuals and juristic persons. [Related report on Page 15: Soft opening of Sandan Industrial Park on January 20]
Oman Observer is now on the WhatsApp channel. Click here
