Arabian Centres renews Jawharat Arriyadh licenses, occupancy rate at pre-pandemic levels: exec

Logo of Arabian Centres

Arabian Centres Co. renewed licenses for work on Jawharat Arriyadh project, Al-Raed district, in December 2021, which is a positive signal for the company, said Chief Financial Officer (CFO) Walead Al-Rebdi.

At the investor conference, which was attended by Argaam, Al-Rebdi said the company continues its work on the project, adding that the occupancy rate returned to the pre-pandemic levels, as it reached 92.8% in the third quarter ending December 2021. This reflects the continued growth in occupancy and strong recovery in commercial activity during the period.

It also represents significant progress towards achieving the management’s strategic goal of recording occupancy rates of 94-95% by 2023, the top executive said.

He added that 689 lease contracts were renewed at the end of the first nine months ending December 2021, which represents 90% of the total lease contracts expiring during the same period.

However, the renewal rates are experiencing pressure, especially in Class C malls.

The company is negotiating new arrangements regarding the expired lease contracts and price improvement for all malls, with a main focus on Class C, including poor-performing malls such as Haifa Mall, Al Salaam Mall in Jeddah, Jubail Mall and Al Ahsa Mall, which constitute 6% of the contracts.

The occupancy rate in Riyadh-based The View Mall reached more than 65%, Al-Rebdi said, adding that the company continues its efforts to open the City Walk Jeddah over an area of 161,500 square meters (sqm) within six to nine months.

Arabian Centres is focusing on the existing portfolio to improve the value for tenants and customers, as well as occupancy rates, Al-Rebdi said, adding that the company obtained a real estate developer qualification certificate from the Off-plan Sales or Rent Program (Wafi) for the purpose of selling excess land areas owned by the company.

Arabian Centres reported a net profit after Zakat and tax of SAR 327.2 million in the first nine months ended 31, 2021, a 9% decrease from SAR 359.7 million a year earlier, according to data compiled by Argaam.

In Q3 2021, the company’s net profit after Zakat and tax rose 15% year-on-year (YoY) to SAR 110.1 million.

In November 2021, the company announced that the title deed of the land located on King Khalid Road, in Al-Raed district, has been canceled by a court decision. The firm added that it is currently working to take all the necessary legal and judicial measures to reinstate the land’s title deed or reclaim its paid price from the seller.