Arabian Centres signs 25-year land lease with Madinah municipality to open shopping center

Arabian Centres Co. signed a lease and investment agreement with Madinah Regional Municipality for a vacant land plot, with SAR 1.07 million as annual rent, to develop a shopping center.

The company will pay a total of SAR 26.67 million for the entire period of the contract, which was signed Nov. 22, it said in a statement to Tadawul.

The contract allows for a 15-month grace period and has duration of 25 Hijri years beginning from the date of signing of the agreement.

The firm will develop an outdoor shopping centre, named “Boulevard U Walk,” on the plot that is located at the intersection of King Salman bin Abdulaziz Road and King Abdulaziz Road in Madinah. The work on the site is expected to begin this fiscal year.

The project will be similar to U-Walk Centre in Riyadh, which opened in September 2019, the statement said.

The project is in line with the company's strategy to expand within the lifestyle shopping centers category that includes entertainment destinations such as cinemas, luxury restaurants and cafes, in addition to retail stores.

The company also aims to ensure expansion in prime locations where there is an elevated demand for modern lifestyle destinations.

On its part, Madinah Regional Municipality is keen to develop Madinah with quality projects that benefit its residents and visitors.

The project will be the second in Arabian Centres portfolio of shopping centers in Madinah, and the firm expects to add about 57,000 square meters to its gross leasable areas (GLA).

The remaining details of the project, its cost and method of financing will be announced later, the statement said.

The financial impact of the agreement is expected to appear on its financial statements, especially on Q3 2020/21.

There are no related parties, the statement added.