Article 36: Valuation

Article 36: Valuation

a) The real estate investment fund manager must, before purchasing or selling any of the Fund’s assets, obtain a valuation from two accredited valuers known for their experience, integrity and knowledge of real estate activity and area under investment.

b) The real estate investment fund manager must ensure that any accredited valuer appointed pursuant to paragraph (a) of this Article meets the following conditions:

1) the accredited valuer must be independent from any related parties

2) the accredited valuer must have obtained the fellowship of the Saudi Authority for Accredited Valuers .

c) The accredited valuers report must contain as a minimum the following:

1. The valuation method, mechanisms and assumptions on which such valuation is based.

2. An analysis of the variables related to the real estate market, such as the demand, supply and market trends.

3. Details and descriptions of the real estate.

4. The risks related to the real estate subject to valuation.

d) On purchasing or selling any of the fund’s assets, the Fund Manager may not rely on any valuation report prepared before more than (3) months prior to purchasing or selling.

e) The Fund Manager must provide the accredited valuers, in a clear, accurate, and not misleading manners, with any information or documents concerning the assets of the real estate fund to be evaluated, which including but not limited to, related contracts, engineering reports, constructions costs and any information that would enable the accredited valuer preparing its report in accordance with regulatory provisions and accredited standards.

f) The fund manager must provide the valuation reports for the real estate prepared by (2) accredited valuers with the Saudi Authority for Accredited Valuers’ fellowship, and publish them during the offer period on its website and the Exchange’s website or any other website available to the public according to the controls set out by the Authority (where applicable), provided that the valuation period did not exceed (3) months at the date of the commencement of the offering, in case of more than two accredited valuers were appointed, the fund manager must publish all the accredited valuers' reports.

g) The Fund Manager must submit a declaration from each accredited valuer confirming that he is complying with the Accredited Valuers Law and its Implementing Regulations and any other Regulations issued by the Saudi Authority for Accredited Valuers (TAQEEM),), and that the scope of the valuation reports is appropriate for the purpose of the fund manager's request and is valid for the public offering. The valuation reports shall include the rental market value of the relevant real estate, if they are different from the contractual rental value in the real estate leases (in case the real estates are income- generating).

h) The Fund Manager must replace the accredited valuers every (5) years at most. Any valuer who has served for such period of time may be re-appointed after a period of (1) year has elapsed from the date of last contract.