Arabian Centres Co. — Capital/Financing Update 2020

Nov 23, 2020

Arabian Centres Co. announces successful agreement to rent and invest in municipal Madinah land

4321 · 23/11/2020 08:27:23 · Announcement #61181 · View on Saudi Exchange

Arabian Centres Co. announces successful agreement to rent and invest in municipal Madinah land

Element List	Explanation
Introduction	Arabian Centres announced on 22 November 2020 the successful conclusion of a 25-year lease and investment agreement with Madinah Regional Municipality to invest in a vacant land plot paying SAR 1,066,933.80 annual rental charge. Under this agreement, Arabian Centres will develop an Outdoor Shopping Centre under the name “Boulevard U Walk”.
Date of Announcement of the Award	2020-11-22 Corresponding to 1442-04-07
Contract Subject Matter	Leasing and investing in a vacant land plot in Al-Madinah Al-Munawarah located at the intersection of King Salman bin Abdulaziz Road and King Abdulaziz Road for a period of 25 years. Arabian Centres will pay an annual rental fee of SAR 1,066,933.80 for the purpose of developing an Outdoor Shopping Centre.
Date of Signing the Contract	2020-11-22 Corresponding to 1442-04-07
Contract Value	Arabian Centres will pay an annual rental fee amounting to SAR 1,066,933.80. For the entire period of the contract, Arabian Centres will pay a total of SAR 26,673,345.00.
Contract Details	Arabian Centres undertakes to invest in and develop a vacant land plot belonging to Madinah Regional Municipality and located at the intersection of King Salman bin Abdulaziz Road and King Abdulaziz Road. The Company will develop the land plot by establishing an Outdoor Shopping Centre, with development anticipated to begin during the current fiscal year.
Contract Duration	25 Hijri years (following a 15-month grace period) beginning from the date of signing of the agreement.
Financial Impact and the Relevant Period	The financial impact of the agreement is expected to appear on its financial statements, especially on the balance sheet, from the third quarter of fiscal year 2021, ending 31 December 2020.
Related Parties	None.
Additional Information	It is worth noting that Arabian Centres intends to deliver the abovementioned project according to an Outdoor Shopping Centre model and under the name of “Boulevard U Walk”, similar to its very much successful predecessor the U-Walk Centre in Riyadh which was opened in September 2019. Also, this project comes in line with the Company's broad strategy, which aims to expand within the lifestyle shopping centers that include various entertainment destinations such as cinemas, luxurious restaurants and cafes, in addition to retail stores.

In particular, this project comes also in line with the Company's strategy of seizing opportunities and prime locations in areas where there is still an elevated demand for modern lifestyle destinations such as the Outdoor Shopping Centres. Additionally, the Madinah Regional Municipality is keen to develop Al-Madinah Al-Munawwarah with quality projects that benefit its residents and visitors, as it is characterized as one of the most growing population regions in the Kingdom, in addition to being a part of the Hajj and Umrah stages that will be positively affected by the 2030 vision that aims to increase the number of tourists and Hajj and Umrah pilgrims greatly.

This project is going to be the second addition to the Company’s portfolio of shopping centers in Al-Madinah Al-Munawwarah, and it is expected to add about 57 thousand square meters to its gross leasable areas (GLA). The remaining details of the project, its cost and method of financing will be announced later. Attached Documents  

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