Jadwa Investment receives notice to suspend hotel lease contract

Jadwa Investment, fund manager of Jadwa REIT Al Haramain Fund received a notice to suspend the lease contract for Tharawat Al Andalusia Hotel, one of Jadwa REIT Al Haramain Fund’s properties.

The fund manager said in a bourse filing on Monday this is due to a force majeure, which is the temporary suspension of Umrah due to the Coronavirus outbreak.

The statement further noted that the suspension is temporary until it gets approval from the authorities to lift it.

The fund manager added that it also received another notification on March 9 for the same property, Tharawat Al Andalusia Hotel. The tenant has notified that the lease contract shall be terminated due to changing conditions in the hospitality sector in Makkah Al-Mukarramah.

The statement also added that the end of the contract will be equivalent to a period of 12 months from the date of notice.

The fund manager will study the offers for operating and leasing the property during the notice period (twelve months) and a decision will be announced after taking the necessary approvals.

The company also expects the temporary suspension of Umrah will have a negative impact on the Fund's returns.

The impact of the termination of the contract will depend on the performance of the hospitality sector in Makkah, the statement also said.