Wednesday, March 22, 2017

Jabal Omar to sell key Makkah real estate assets for $1.6bn

Jabal Omar Development, the largest listed real estate group in Saudi Arabia by market capitalisation, said it has reached an agreement with Alinma Investment Company for the sale of its key assets in Makkah including three major hotels and a shopping mall for SR6 billion ($1.59 billion).

These include the Saudi developer's ambitious hospitality project - Makkah Conrad, Hilton Makkah, Hyatt Regency Makkah - besides the Al Khalil Shopping Centre, the company said in a statement to Saudi bourse, Tadawul.

The Jabal Omar deal comes following a five-month MoU signed in August last year with Alinma Investment for setting up a fund that would sell and lease back real estate assets.

Under this MoU, the fund will acquire income-generating operating assets, which are located in the first phase of Jabal Omar's Makkah development project.

If a deal for the new fund is reached, Alinma will re-lease the assets to Jabal Omar, which will retain its right to re-purchase them after five years from the fund’s ten-year term, Saudi-based developer had stated in the 2016 statement to Tadawul.

Jabal Omar said part of the proceeds will be used to settle outstanding bank commitments and the remaining amount will be used to implement the project strategy.

The financial impact is expected to be positively reflected on revenues and shareholders' equity during the current financial year, following the completion of the fund's establishment and completion of the acquisition of assets by Alinma Investment Company, it added.-TradeArabia News Service

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