Banan’s unit signs SAR 224M contract with Armah Sports

Under the agreement, Qimam Noshoz will develop the land leased by Armah into two fully equipped fitness clubs (one for men and one for women), excluding movable furniture and sports equipment. Additionally, Qimam Noshoz will develop and operate a commercial building.

Armah Sports will lease the fitness clubs under a long-term contract for 19 years, starting from the handover date. The initial value is SAR 224.02 million (excluding VAT), with a potential increase of up to 24%. Qimam Noshoz will bear the full cost of leasing the land for the contract duration.

During the project’s development phase, Banan expects direct revenue while enhancing its investment returns through its 23%-owned subsidiary. Further, Al-Azizah Investment and Real Estate Development Co. owns 22% of Qimam Noshoz.

The land plot is leased by Armah Sports for 21.5 years at SAR 5.5 million annually, with a 10% rent increase every five years and a 1.5-year grace period. Qimam Noshoz will sublease the land under the same terms.

The total development cost is estimated at SAR 70 million, covering the construction of the two clubs, which will be leased to Armah Sports, and a commercial building that Qimam Noshoz will lease independently.

Armah Sports revealed that the two fitness clubs will operate under its Optimo brand, catering to clients seeking luxury, privacy, and high-end services.

Banan described this project as the first of several planned collaborations between Armah Sports, Banan Real Estate, and its subsidiaries, aimed at expanding integrated fitness facilities and diversifying funding sources for growth.

Under the contract, Armah Sports will re-lease the land leased from the owner, Saad Abdulrahman Al-Lehaidan, to Qimam Noshoz to complete the development. It will announce any major updates once the lease documentation is complete.

Both companies clarified that no related parties are involved in the deal.