Jadwa REIT Al Haramain receives notice to terminate lease of Tharawat Al-Taqwa Hotel

Jadwa Investment, fund manager of Jadwa REIT Al Haramain Fund, received, on August 18, a notice from Tharwat Al-Mashaer Real Estate Development and Investment Company in its capacity as the tenant of Tharawat Al-Taqwa Hotel, owned by the REIT, to terminate the lease contract.

The fund manager said in a bourse filing on Thursday that the lease contract stated that the lessee has the right to terminate the contract after a period of 4 Hijri years from the beginning date of the lease term “Jumada Al-Awwal 01, 1439” (the mandatory lease period).

The tenant has to notify the lessor in writing of the termination request in a period of no less than 12 Hijri months prior to the termination date. Therefore, the end the contract period will be on 01/05/1443 AH, equivalent to 16 months from the date of notification.

Accordingly, Jadwa Investment will identify the offers to operate and lease the Tharawat Al Taqwa Hotel according to the performance of the hospitality sector in Makkah during the notification period.

The fund manager is currently unable to accurately determine the financial impact, which mainly depends on the future performance of the hospitality market in Makkah, the statement said, clarifying that the event could have a positive or negative impact depending on the future offers.

Any further developments will be disclosed in due course.

In March 2020, Jadwa Investment received a notice from tenants of Tharawat Al Taqwa Hotel and Pharmacy Building, the two properties owned by the REIT, to temporarily suspend lease contracts until the authorities lift the suspension.