Alandalus has solid balance sheet, cash flows for dividends: CEO

Faisal Al-Nasser CEO of Alandalus Property Co.

Alandalus Property Co. enjoys a strong balance sheet and robust cash flows, enabling it to maintain periodic cash dividends and finance its projects, CEO Faisal Al-Nasser told Argaam.

Alandalus maintained average occupancy rates across different sectors in 2023, compared to a year earlier. The office sector reached full occupancy at 100%, while the hospitality sector saw an 8% increase in occupancy, compared to 2022. The retail sector maintained an average occupancy of around 94% for commercial centers within the sector.

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The company continues to seek diverse investment opportunities of qualitative value, aiming to maximize the wealth of shareholders and enhance its leading role as an investor, developer, and real estate operator. Further, Alandalus has currently no plans to divest any existing project, Al-Nasser added.

On the company’s projects, the CEO explained that The Village project, owned by Al-Jawhara Al-Kubra - where Alandalus owns 25% of the capital - commenced operations in late H1 2023. The occupancy rate is expected to reach nearly 70% by the end of the year. The positive impact will show in the period following launch and commencement of operations, to be reflected in Alandalus’ results in 2024.

Regarding the financial impact of operating West Jeddah Hospital Co., Al-Nasser added that an announcement was earlier made by Alandalus and Dr. Sulaiman Al Habib Medical Services Group that the hospital will begin operations by the end of the first quarter of 2024. He expected the relevant financial impact to be reflected on Alandalus results in 2024, considering the initial stages of the hospital’s operation, noting that the overall impact depends on the hospital’s results.

Meanwhile, Al-Nasser added that the decline in Alandalus’ profits in 2023 was primarily attributed to a significant increase of around 60% in financing costs, due to rising SAIBOR.

Despite this, the company secured additional Islamic facilities in 2023 to fund the Alandalus Mall expansion project and the acquisition of the office tower in Riyadh during the fourth quarter of the year. Al-Nasser underscored that increased operating expenses, particularly in the retail and hospitality sectors, weighed on the company’s full-year profits.