Arabian Centres amends “U Walk Jeddah” land lease contract

The total value of land rent over the course of the contract has been reduced by $166mln

  
Image used for illustrative purpose. Saudi couple at the beach in Jeddah's corniche in the Red Sea coast, with residential skyscrapers in the background.

Image used for illustrative purpose. Saudi couple at the beach in Jeddah's corniche in the Red Sea coast, with residential skyscrapers in the background.

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Riyadh – Arabian Centres Company (ACC) has concluded negotiations with the heirs of Princess Munira bint Abdulaziz Al Jiluwi Al Saud to amend some provisions of the company’s lease contract signed on 16 July 2015 for the U Walk Jeddah Centre (Zahra Mall previously).

The total value of land rent over the course of the contract has been reduced by SAR 620 million from SAR 1.785 billion to SAR 1.075 billion, according to a bourse statement on Wednesday.

Moreover, the start date of the lease period was amended to begin from 1 August 2022 and to end on 31 July 2052.

These amendments will reduce ACC’s right-of-use assets and lease contract liabilities within the balance sheet. On the income statement, reductions will be made to depreciation expenses on right-of-use assets and interest expenses on lease liabilities.

This impact is expected to reflect on ACC’s financials during the third quarter of fiscal year 2021.

Noteworthy to highlight, Arabian Centres intends to deliver the project as per an outdoor shopping centre model and under the name of “U Walk Jeddah”, similar to the U-Walk Centre in Riyadh which was opened in September 2019.

Source: Mubasher

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