Jadwa REIT Saudi signs new lease agreement for Al Yaum Tower with SAR 16.15 mln annual rent

Logo of Jadwa REIT Saudi Fund

Jadwa Investment Co., the fund manager of Jadwa REIT Saudi Fund, announced the termination of the current lease contract for Al Yaum Tower in Dammam and signed a new master lease agreement for the tower on Oct. 31.

The fund signed an agreement with Worley Parsons Engineering Consultancies Co. to lease the tower entirely with an annual rent of SAR 16.15 million for each year, excluding value-added tax (VAT). The previous agreement term ends on Sept. 30, 2022, according to a bourse filing today, Nov. 1.

The six-year agreement starts from Aug. 1, 2021, and ends on July 31, 2027, with four binding years. The tenant will have the right to break the lease after the end of the binding period, subject to nine months’ notice before the termination date.

The tenant is one of the leading engineering consultants globally and provides project management, consultations and asset management in energy, chemicals and natural resources. It has a workforce number exceeding 50,000 across 51 countries worldwide, and annual revenue exceeded $13 billion for 2020.

The decrease in the rental value from SAR 25.26 million to SAR 16.15 million equals a reduction of 4.26% from gross annual revenue of the fund, given that this impact is related to the last year of the previous agreement term.

Furthermore, the signing of the new agreement secures 100% occupancy of the tower for additional years to come, the statement noted.