Corporate News Room
Supplementary Announcement from JODC regarding the Signing of a Memorandum of Understanding with the Alinma Investment to establish a Fund for the Sale and Leaseback of Real Estate Assets
Further to the company’s announcement published on the Saudi Stock Exchange’s website “Tadawul” on 22/11/1437 AH, corresponding to 25/8/2016, JODC announced that on Tuesday 22/6/1438 AH, corresponding to 21/3/2017, it has signed a sale contract of three hotels: Concorde Makkah Hotel, Hilton Suites Makkah Hotel, and Hyatt Regency Hotel; in addition to Souk Al Khalil, located within its project in Makkah to Alinma Investment, with a value equivalent to six billion riyals. The contract comes as a supplementary to the memorandum of understanding signed by the company with Alinma Investment, under which a Real Estate Investment Traded Fund (REIT) will be established, after obtaining the necessary approvals from the Capital Market Authority from the Fund Manager.
Based on the agreement, JODC will lease and operate the mentioned assets after selling them to the Fund for a period of ten years. As stated by the agreement, JODC will be entitled to repurchase the assets mentioned above, starting from the end of the fifth year of the Fund’s term, which is determined by ten years, until the end of the tenth year. The company indicated that part of the sales proceeds will be used for the payment of the existing bank obligations, and the remaining amount will be used to implement the project’s strategy.
It is expected that the financial impact will positively show in the revenues and shareholders’ equity in the current fiscal year, upon the completion of the Fund’s establishment; in addition to Alinma Investment’s conclusion of the assets acquisition process.