![Arabian Centres Co. launched two other mall projects last month. [Image: Arabian Centres Co.]](https://www.constructionweeksaudi.com/cloud/2022/07/21/Arabian-Centres-.jpg)
Saudi Stock Exchange-listed Arabian Centres Co. has signed a lease and investment agreement for a 300,000m2 land plot located north of Al-Khobar city in Al-Kurnaish district to develop Jawharat Al-Khobar Mall.
In a stock market missive, the developer said that the agreement has been signed for a period of 30 years, which is renewable upon the agreement of both the parties involved in the project. The average annual lease amount is set at around $13.7mn (SR51.5mn) for the purpose of developing the mall and other mixed-use commercial facilities.
Arabian Centres Co. plans to initiate the development works of Jawharat Al-Khobar Mall during the next six months with a budgeted development cost ranging from $266mn (SAR1bn) to $346mn (SAR1.3bn). Upon completion, the mall will offer between 130,000m2 to 150,000m2 of gross leasable area.
The developer confirmed in the filing that the development works are expected to be completed and the mall is set to open between H2 2025 and H1 2026. The mall has been estimated to generate annual revenue ranging from $77.2mn (SAR290mn) to $87.8mn (SAR330mn).
Furthermore, Arabian Centres Co. said that the development will be allocated for mixed-use purposes including a hotel and offices, which will be connected to the mall at a later stage. This will add up to 30% of additional returns in the future for ACC.
Arabian Centres Co. strategises expansion
Arabian Centres Co. has been focusing on lifestyle destinations in the kingdom as part of its wider expansion plans. The Jawharat Al-Khobar Mall will be the third flagship lifestyle destination to be part of the company’s malls’ portfolio, alongside Jawharat Al-Riyadh Mall and Jawharat Jeddah Mall. Both projects are currently under development.
Additionally, the mall in Al-Khobar will become the sixth addition to its malls’ portfolio in Eastern Province and the 30th addition to the malls’ portfolio in Saudi Arabia.
In the disclosure, Arabian Centres Co. also revealed that the land lease option has been well aligned with its broader strategy of committing to an asset-light model. This model will allow the developer to maximise the investment returns to its shareholders and mitigate risks that would arise from keeping all of its operational properties on its balance sheet, enhancing the financial and operational flexibility required for new projects.
According to ACC, the impact of the new contract is expected to appear on the company’s financial statements starting from Q2 2023.
