Sulaiman Al Habib converts Riyadh medical center project to hospital for SAR 539 million

Logo of Dr. Sulaiman Al Habib Medical Services Group

Dr. Sulaiman Al Habib Medical Services Group’s board of directors approved, on Dec. 18, to establish a new hospital in Riyadh by converting the medical center project in Al Hamra district to a 90-bed hospital, at an estimated cost of SAR 539 million.

In a statement to Tadawul, Sulaiman Al Habib pointed out that the hospital will be established on a land owned by group’s subsidiary Al Marakez Al Awwalyah for Healthcare Co., with an area of 13,300 square meters (sqm).

Meanwhile, the project’s total built-up area is estimated at 54,100 sqm.

The land ownership will be completely transferred to a new company to be established for this project. The new company will be wholly owned subsidiary of Sulaiman Al Habib.

Construction works of the medical center -- which was announced on Oct. 25, 2021, within the framework of the company’s strategy to expand its medical centers’ services -- are underway since Q2 2022.

The company is seeking to obtain all the necessary regulatory approvals from the competent authorities to convert the project from a medical center to a hospital.

The medical services provider further indicated that the project is funded via internal resources and long-term Shariah-compliant loans provided by local banks.

Construction works are expected to be completed by Q1 2025, after obtaining the necessary regulatory approvals.

An impact on the company's Q2 2025 financial results is expected to be witnessed upon the initiation of commercial operation.

Any other developments related to this project will be disclosed in due course and after obtaining the required regulatory approvals, the statement added.

Argaam reported earlier that Sulaiman Al Habibi signed a contract with MASAH Construction Co. (a related party), at a value of SAR 63.3 million, including value-added tax (VAT), for the construction works of the Riyadh medical center. The shareholders approved the contract during the ordinary general meeting (OGM) on April, 18.

Some modifications will be made to the project drawings to be suitable for a hospital design.

Consequently, changes in the scope of work and cost of construction works contract are to be made, the medical provider expected, indicating that the final cost value of the contract will be presented before the OGM as per the relevant regulations.

The Chairman Sulaiman Abdulaziz Al Habib and the board member Hisham Sulaiman Al Habib are related parties with indirect interests, the company added.

Any other material developments in this regard will be disclosed in due course.

It is worth mentioning that according to data compiled by Argaam, Dr. Sulaiman Al Habib Medical Services Group’s (HMG) subsidiary Al Marakez Al Awwalyah for Healthcare Co. signed an agreement on July 1, 2021 with Wajahat Al Hamra for Investment Co. (related party) to purchase 12 adjacent land plots at a total area of 13,300 sqm in Riyadh for SAR 69.04 million, excluding the real estate transaction tax.

The board of directors approved, in Oct. 2021, the strategy to expand its medical centers’ services under the brand "Dr. Sulaiman Al Habib (Medical Center)", through the group’s wholly-owned subsidiary Al Marakez Al Awwalyah for Healthcare Co.

The group's expansion plans included the establishment of medical centers in a number of locations including Al Hamra district in Riyadh.