Cenomi Centers: Riyadh rent caps’ impact may not exceed 1% of revenue

Logo of Arabian Centres Co. (Cenomi Centers)

Arabian Centres Co. (Cenomi Centers) said the new regulations governing landlord-tenant relationships in Riyadh are expected to have only a limited financial impact on the company.

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On Sept. 25, authorities issued a new decision regulating contractual relationships between landlords and tenants in Riyadh. The decision freezes rent increases for five years on new contracts and renewals.

In a statement to Tadawul, Cenomi Centers said existing contracts will continue under their current commercial terms until they expire, which will limit the financial impact of the new regulations.

The company added that the direct impact on its revenues is expected to be limited, as it will likely not exceed 1% of annual revenue during the application period. It also outlined the expected impact over the next five years in the following table:

However, the company is actively implementing several measures to mitigate the impact on profit margins by enhancing and diversifying revenues from other sources and securing better commercial terms when leasing vacant units, the statement added.