SAL Saudi Logistics Services Company has signed a lease agreement for 1.57 million square metres (sqm) of land in Falcon City, north of Riyadh, to develop a new logistics zone.

The total estimated investment for planning, construction, and operation of the logistics zone will reach nearly 4.2 billion Saudi riyals ($1.14 billion), the company said in a statement to the Saudi stock exchange on Tuesday.

In March, SAL signed a preliminary agreement with Sela Company to lease the land. No specific details on the project or completion timelines were given.

The lease will run for 30 years, extendable to an additional 15 years upon agreement of both parties, along with a three-year grace period, the statement said.

The lease rate will be SAR 16/ square metre annually, increasing by 1.5 percent per year throughout the lease term.

The logistics zone will support SAL’s strategic plan to expand, diversify its income sources, and strengthen its presence in the Kingdom’s transport and logistics sector.

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(Editing by Anoop Menon) (anoop.menon@lseg.com)

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