SICO Saudi REIT receives notice from tenant on intent not to renew lease contract

SICO Capital, the fund manager of SICO Saudi REIT Fund, announced that it received, on Dec. 26, a notice from Eskan Development and Investment Co., in its capacity as the tenant of one the fund's properties (Eskan Tower 4 and Eskan Tower 6), in which it expressed intent not to renew the lease contract, according to a bourse statement.

As per the lease contract, the tenant has the right to cancel the contract after the lapse of five years from the start of the lease term on Dec. 27, 2017 (the initial term).

The lease contract states that the two parties have the right to cancel the contract after the initial term provided that a reasonable notice is sent one year (365 Gregorian days) ahead of the end of the initial term.

Accordingly, the contract term will end on Dec. 27, 2022.

As the lease contract will expire the next year, the fund manager fails to accurately determine the relevant impact, which depends mainly on the performance of the hospitality sector in Makkah in the future.

The fund manager will duly announce any material future developments in relation to future operating and lease contracts.