Jabal Omar stops paying rent to Alinma Makkah Fund on lack of revenue

Jabal Omar Development Co. decided to suspend rental payment from May to November 2020, amounting to SAR 270 million, due to force majeure resulting from COVID-19 pandemic.

The developer said in a bourse filing on Tuesday that the above decision was due to the lack of revenues from hotels and retail space rented from Alinma Makkah Real Estate Fund from the date of implementing precautionary measures by the government to prevent spread of coronavirus. 

Moreover, the company asked Alinma Investment Co., the fund manager, today to refund rent, totaling SAR 172.1 million (including any amounts previously deposited as rental returns in the escrow account), which was paid in advance for March 10 to May 7, 2020 period as it did not benefit due to the closure of hotels and retail stores during the period.

In March 2017, Jabal Omar had sold 3 hotels and commercial mall to Alinma Makkah Fund for SAR 6 billion. As per the agreement, the developer will re-rent and operate the assets for a period of 10 years with an annual rent of SAR 540 million.