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

Logo of Abdullah Al Othaim Markets Co.

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

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In a statement to Tadawul today, April 21, Al Othaim confirmed that the 15-year contract is valued at SAR 633.7 million, entailing an annual rent of SAR 39 million (VAT exclusive). The rent value will see 4% cumulative increment 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 extension term, in accordance with International Financial Reporting Standard (IFRS 16).

The GOSI land lease is valued at SAR 331.5 million (excluding VAT) over the 15-year period, taking effect as of June 9, 2028.

In a separate Tadawul statement, Al Othaim announced signing another 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. The related 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 related parties to both contracts. The deal is still pending the general assembly’s approval, in line with regulations governing related-party transactions.