Description of the Event

Alinma Capital Company, in its capacity as the Fund Manager of the Alinma Retail REIT Fund, announces the sale of Almakan Mall in Tabouk (“The Mall”)for SAR 50 million

The Fund Manager would like to draw the unitholders attention to the following:

• The Mall was acquired as part of the Fund’s initial portfolio during its management by the previous Fund Manager (prior to the appointment of Alinma Capital Company as Fund Manager).
• Fund paid the acquisition price through a combination of cash contribution and in-kind contribution represented by Fund units)67% of the acquisition price(.
• The Mall experienced low occupancy levels due to tenant exits during 2019 and 2020, followed by the impact of the COVID-19 pandemic on the retail sector. In addition, the opening of new shopping malls in Tabouk, along with the shift in consumer behavior towards online retail, further affected the ability to attract tenants.
• Since the appointment of Alinma Capital Company as Fund Manager on 30 November 2021 has conducted a comprehensive review of available options to maximize value from all fund’s assets For Al Makan Mall in Tabouk, the options considered included full leasing of the property, continuing operational improvements, undertaking structural modifications to enhance leasing potential, or disposing of the asset.
• The Fund’s Board of Directors resolved to hold an auction in December 2023; however, the auction failed to attract any bids.
• The Mall did not generate positive income for the Fund in 2023 and 2024, and its net operating income did not exceed SAR 180,000 in 2025.

The sale of Al Makan Mall in Tabouk is in line with the implementation of the Fund Manager’s strategy for managing the Fund’s real estate asset portfolio, which aims to enhance the Fund’s cash flows through the optimal utilization of its real estate assets, reduce asset concentration in secondary cities, and focus on investments in primary cities. As a result, the Fund’s ownership in primary cities increased to 74.53% by the end of 2025, compared to 27.16% in 2021. In addition, the Fund’s net operating income improved by 51.80% over the same period, which led to an increase in cash distributions from 10 halalas to 35 halalas per unit.

The Fund Manager intends to utilize the sale proceeds to finance the Fund’s units Buy-back in line with the Fund’s investment strategy. In event of any excess cash, it may be utilized to enhance existing assets or partial settlement of the outstanding credit facilities.

The Impact Caused by the Event

The utilization of the sale proceeds is expected to have a positive impact on the Fund and support higher cash distributions per unit.