BAAN Holding CEO: New real estate acquisitions to drive turnaround

BAAN plans increasing capital from SAR 315 million to SAR 619.97 million, through the issuance of up to 304.97 million new ordinary shares

Fahad Al-Obailan, CEO of BAAN Holding Group Co., said the recent move to acquire some new real estate assets will put the group back on the right track.

In an interview with Al Arabiya TV, Al-Obailan explained that the move is part of the group’s strategic turnaround plan. Upon completion, the company’s accumulated losses will decline from their current level as they will be addressed through the share premium generated by the assets’ valuation.

He pointed out that the shares to be issued for the acquisition are valued at SAR 2.7 apiece, based on the average stock price at the time the agreement was signed. Given that the current share price is around SAR 2.1, this is a strong indicator that the deal represents an attractive opportunity for investors.

Regarding the agreement with Al-Oula Real Estate Development Co. (AlOula RED) to acquire residential units in the Ajdan Waterfront Tower in Al Khobar, Al-Obailan stated that the property is located in one of the prime areas of the city, highlighting strong demand in Al Khobar for furnished units available for daily, monthly, or annual rental.

BAAN, according to the top executive, will leverage its expertise in the hospitality sector to operate such units, underlining that Al Khobar is poised for massive development, including several major tourism projects and sports stadiums in the pipeline.

Addressing the deal with Abdulmohsen Abdulaziz Al Hokair Holding Group, Al-Obailan said any related-party transactions are considered sensitive. Therefore, the board focused on selecting high-yield, income-generating assets that the group would continue to manage regardless of ownership.

These assets include the DoubleTree by Hilton Hotel in Riyadh on the Northern Ring Road, which is strategically among the group’s highest-revenue assets. The second asset is the Radisson Blu Hotel on the Jeddah Corniche, a premier asset that is situated directly on the F1 track and along the waterfront. The third asset is Jeddah’s Holiday Inn Hotel, located on Madinah Road, near the airport, he stated.

According to the CEO, these assets were chosen based on their structural quality, facilities, and strong revenue streams. The latter three were selected from a portfolio of 14 assets currently managed by BAAN but owned by Al Hokair Group.

The valuations were conducted using the discounted cash flow (DCF) method by accredited real estate appraisers, with a subsequent revaluation performed following the issuance of new real estate regulations in Riyadh to ensure market alignment, he continued.

Al-Obailan also stated that the first nine months of 2025 saw operating losses. This came as the group exited certain locations as part of its strategic transformation, which aims to divest from any managed assets that do not generate positive returns. He emphasized that the turnaround plan will continue even after the planned capital increase.

According to Argaam's data, BAAN Holding signed, in December 2024, two binding agreements to acquire some real estate assets. The first agreement was with AlOula RED, involving the acquisition of 86 residential units in Al Khobar’s Ajdan Waterfront Tower project, paid via the issuance of new shares in favor of AlOula RED or its affiliate.

The second agreement was with Al Hokair Group for the acquisition of six properties housing three hotels in Riyadh and Jeddah. This deal was also paid via the issuance of new shares.

AlOula RED’s transaction was valued at SAR 178.5 million, while Al Hokair Group’s transaction was worth SAR 651.62 million.

The Capital Market Authority (CMA) approved, on Dec. 24, 2025, the company's application to increase its capital from SAR 315 million to SAR 619.97 million. The planned capital hike will be through the issuance of up to 304.97 million new ordinary shares to finalize these acquisitions.