Saudi Catering inks 7-year lease contract with SARED

Saudi Airlines Catering Co. (SACC) has signed a seven-year lease contract with Saudi Airlines Real Estate Development Co. (SARED) to renovate and operate the Saudia Hotel in Jeddah’s Al Khalidiyah district.

The deal, which runs from April 1, 2016 through March 31, 2023, is worth SAR 2.4 million annually and can be raised by up to 5 percent after the fifth year, the catering firm said in a bourse statement.

SACC will rehabilitate, furnish and operate the hotel and the related entertainment center, which is comprised of eight buildings. It will also provide catering and laundry services.

The project will be financed from SACC’s operating cash flow and is expected to reflect positively on Q4-2016 financial results, the statement said.

Saudi Arabian Airlines (Saudia) owns the Saudia Hotel, SARED and is a major shareholder in SACC.