Al Othaim renews Dammam mall lease for SAR 633.7M, expects SAR 300M profit

Abdullah Al Othaim Markets Co. signed a lease renewal agreement on April 20 with Abdullah Al Othaim Investment Co. for a commercial complex located on land leased from the General Organization for Social Insurance (GOSI) in Dammam.

In a statement to Tadawul on April 21, Al Othaim confirmed that the contract is valued at SAR 633.7 million over a 15-year period, with an annual rent of SAR 39 million, excluding VAT. The rent will increase by 4% every three years.

The renewal period will start after the current contract expires on June 9, 2028.

Al Othaim expects to generate a profit of approximately SAR 300 million over the full term of the contract. Revenues and expenses will be recorded from the contract’s signing date until the end of the renewed term in accordance with International Financial Reporting Standard (IFRS 16).

The lease for the GOSI land is valued at SAR 331.5 million (excluding VAT) over the 15-year period, with the contract commencing on June 9, 2028.

In a separate disclosure, Al Othaim said it signed a lease renewal agreement with Abdullah Al Othaim Investment for a showroom within the same commercial complex in Dammam.

The 15-year contract is valued at SAR 33.16 million and will take effect on June 9, 2028. Annual rent is set at SAR 2.08 million, excluding VAT, with a compounded 4% increase every three years.

Al Othaim said the renewal is expected to support continued profit generation and improvements to the leased property. Financial impact will be recognized from the signing date through the end of the term under IFRS 16.

The company noted that Chairman Abdullah Saleh Al-Othaim and Board Member Bandar Sulaiman Al-Buhairi are involved in both contracts. The deal will be submitted to the general assembly for approval, in line with regulations governing related-party transactions.