Arabian Centres Company (Senomy Centres), a leading developer and operator of shopping malls in Saudi Arabia, announced today, Thursday, a strategic decision to withdraw from its lease and investment agreement for land located north of Al-Khobar in the Corniche district, which was designated for the development of the “Jewel of Al-Khobar Mall” project. The company clarified in its statement that the termination of the agreement was amicable and agreed upon by all parties involved.
Reasons for the decline and change in strategy
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company revealed that this decision comes as a result of a comprehensive review of its investment strategy regarding this project at its current location. Based on ongoing assessments, the management of Sinomi Centers decided not to proceed with implementation, preferring to direct its resources towards exploring alternative investment opportunities. Through this step, the company aims to seek options that offer higher economic returns and more efficient and sustainable cash flows, serving the interests of shareholders and strengthening the company's financial position.
Project background and details of the previous contract
The origins of this agreement date back to July 2022, when Sinomi Centers signed an agreement to lease and invest in a vast plot of land, approximately 300,000 square meters, in a strategic location north of Al-Khobar in the Corniche district. The contract stipulated a 30-year investment period, renewable by mutual agreement, with an average annual rental value of approximately SAR 51.5 million. The original plan aimed to develop "Jewel of Al-Khobar Mall" into an integrated retail and entertainment destination, featuring multi-use facilities to serve residents and visitors of the Eastern Province.
The context of “Al Jawhara” projects and the company’s position
Sinomy Centers is the largest owner, developer, and operator of modern shopping malls in the Kingdom. The Al Jawhara projects fall under the category of luxury malls that the company is developing in major cities (Riyadh, Jeddah, and Al Khobar). Despite the withdrawal from the current Al Khobar location, the company continues to work on its other major projects, such as Jawharat Riyadh and Jawharat Jeddah, which are key components of its future expansion plans to deliver a world-class shopping experience.
Economic impact and future direction
This decision reflects the company's flexibility in dealing with economic changes and its commitment to capital efficiency. With the rapid development of the retail and entertainment sectors in Saudi Arabia under Vision 2030, major companies are scrutinizing the viability of their projects to ensure optimal returns. Analysts indicate that divesting from long-term commitments that do not meet updated financial targets is a positive step that benefits the company's cash flow, allowing it to reallocate liquidity to faster-growing projects or to settle existing obligations.
