Shams signs SAR 31.1M lease agreement for 17-story hotel in Riyadh

The 17-story hotel is located in As Sahafah district in northern Riyadh

Tourism Enterprise Co. (Shams) launched its first hotel project in Riyadh after signing a lease investment agreement with Al Malqa Elite Hotel, at a total value of SAR 31.1 million, including value-added tax (VAT), according to a statement to Tadawul.

Under the 10-year contract, the company will lease and operate a 17-story hotel in As Sahafah district, with annual rental payments increasing gradually. Annual rent will stand at SAR 2.8 million for the first two years, rising to SAR 3 million from the third through fifth years and SAR 3.3 million from the sixth year until the contract expires.

The lease term will commence on Jan. 1, 2027, following a rent-free period from Oct. 15 to Dec. 31, 2026, the company said, adding that it will undertake hotel operations from the contract signing date.

Shams said the agreement aligns with its ongoing strategic transformation, aimed at diversifying revenue streams and expanding beyond the Eastern Province. The hotel is strategically located in northern Riyadh.

The relevant financial impact will likely appear in its results starting in Q1 2027, and the company will disclose any subsequent material developments related to the contract in due course.

Shams emphasized that the project marks the beginning of a carefully planned expansion strategy aimed at boosting operating revenue and strengthening its presence in the rapidly growing hospitality sector, supporting growth in its core business.