SAL inks land lease deal for SAR 4.2B logistics hub in Riyadh

Logo of SAL Saudi Logistics Services Co. 

SAL Saudi Logistics Services Co. signed today, Oct. 7, the final (sub usufruct) agreement with Sela Co. to lease a land plot in Falcon City, north of Riyadh, covering a total area of 1.57 million square meters (sqm) - an increase of 12,220 sqm from the preliminary agreement.

In a statement to Tadawul, the company said no changes were made to the contract duration or the agreed grace period. This step aligns with SAL’s strategic plan to expand, diversify its income sources, and strengthen its presence in the transport and logistics sector in line with its long-term strategic objectives.

The company added that the costs associated with signing the final agreement include a non-refundable fee of SAR 25 million, payable once upon signing and allocated to cover permanent infrastructure costs.

It also includes an annual rental value of SAR 16 per sqm, with an annual increase of 1.5% throughout the contract period after the agreed grace period. In addition, SAL will pay public service fees to Sela, which will apply after the end of the grace period.

The total investment value for planning, construction, and operation of the logistics zone is expected to reach approximately SAR 4.2 billion.

According to data compiled by Argaam, SAL signed a preliminary agreement last March with Sela to lease land covering 1.56 million sqm in Falcon City, Malham area, north Riyadh, to develop, build, and operate a logistics zone with estimated investments of about SAR 4 billion.

Under the agreement, SAL will lease the land to implement its logistics projects and services for a period of 30 years, renewable for an additional 15 years upon mutual agreement, with a three-year grace period.