'Shams' Signs Lease Contract for 17-Story Hotel in Riyadh for SAR 31.1 Million
'Shams' signed a ten-year lease investment contract to operate a 17-story hotel in Riyadh valued at SAR 31.1 million including tax.
Tourism Enterprise Co. ('Shams') announced the signing of a lease investment contract with Nukhbat Al-Malqa Hotel Co. to operate a 17-story hotel in Al-Sahafa district, north of Riyadh, for a total value of SAR 31.1 million including value-added tax (VAT), according to a disclosure on Tadawul reported by the Argaam platform.
The contract spans ten years, with an annual rent starting at SAR 2.8 million in the first two years, rising to SAR 3 million from the third to fifth year, and then to SAR 3.3 million from the sixth year onward. The lease term will begin on January 1, 2027, following a rent-free grace period from October 15 to December 31, 2026.
The company stated that the agreement aligns with its strategic shift to diversify revenue streams and expand beyond the Eastern Province, expecting the financial impact of the contract to appear in its results starting from the first quarter of 2027.
It explained that the project represents the beginning of a well-studied expansion plan to boost operational revenues and its presence in the hospitality sector, marking its first hotel project in Riyadh.
What do these terms mean?
Lease investment contract: An agreement under which an investor leases a property for a specified period for a set rent, while investing in and operating it.
Value-added tax (VAT): A tax added to the price of a good or service upon sale, which stands at 15% in Saudi Arabia.
Rent-free period: A period during which the landlord allows the use of the property without rent to fit it out before payments begin.
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