Saudi travel and hospitality company Seera Holding announced on Wednesday that it signed an agreement with AlUla Development Company to set up a joint venture to develop and operate a 215-room hotel in the cultural and touristic destination of AlUla in the North-West. 

Seera Holding said in a stock exchange statement that it would own 51 percent of the JV company, with Al-Ula Development Company holding the remaining 49 percent. 

Seera said the 170-million Saudi riyal ($45 million) project would occupy a 9,000-square metre plot in AlUla's Central Business District, adding that the JV company would sign a 50-year lease agreement with Al-Ula Development Company for the plot.

The hotel would operate under the Clarion brand, owned by global hospitality chain Choice Hotels. Seera is the Middle East master franchisee for Choice Hotel brands.

The statement said that the hotel is expected to start operating in the first quarter of 2024.

It said the JV company would own the property during the lease period.

The project will be 30 percent financed by the JV partners, with 70 percent funded per Islamic law.

The statement said the annual profit before tax, depreciation, and amortisation is expected to range between 25 and 30 million riyals ($7 to $8 million) in a stable year, and the financial impact is expected to be reflected starting with the operation of the hotel.

(Writing by SA Kader; Editing by Anoop Menon)

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2022