Dr. Sulaiman Abdulqader Faqih Hospital Company (Faqih Medical), listed on the Saudi Stock Exchange, announced a new strategic step that strengthens its geographic presence in the Kingdom. The company signed a significant agreement with Alouf Development Company, the investment arm wholly owned by the Jazan Region Municipality. This agreement aims to lease a prime piece of land to establish and operate a comprehensive healthcare facility, in a deal valued at SAR 217.9 million.
Deal details and timeline
According to a statement published on the Saudi Stock Exchange (Tadawul), the land is located in the Al-Shati district of Jazan and spans 34,581 square meters. The lease is for 50 years, renewable for additional periods of up to 50 years (25 years renewable again), reflecting the project's long-term vision. The project is structured as a Build-Operate-Transfer (BOT) project, with Fakieh Medical undertaking all construction and operation activities throughout the lease term.
The rental payments have been divided into a flexible schedule that supports the project’s cash flows, starting with an initial payment upon signing of approximately 1.7 million riyals, followed by a grace period of two years, and then the payments gradually increase to reach a total value of 217.9 million riyals by the end of the contract.
Jazan: A promising investment destination with rapid growth
This step comes within the context of the major economic transformations taking place in the Jazan region. The region is no longer merely a traditional agricultural destination, but has transformed, thanks to the Kingdom's Vision 2030, into a major industrial and logistical hub, particularly with the development of Jazan City for basic and downstream industries. This rapid industrial growth has attracted a large influx of labor and skilled personnel, creating a growing and urgent demand for high-quality healthcare services, which are lacking in some outlying areas compared to major cities.
Choosing the land location in the “Al-Shati’a District” is a strategic choice, as it is located within an urban area that is witnessing qualitative development, which ensures easy access to the facility and places it at the heart of the city’s development movement.
Strengthening the partnership between the public and private sectors
This agreement exemplifies a model of partnership between the public sector (represented by the Jazan Municipality and its subsidiary) and the private sector (Fakieh Medical). This step aligns with the objectives of the Health Sector Transformation Program and the Privatization Program, which aim to increase the private sector's contribution to healthcare services and improve the quality of life for citizens and residents across all regions of the Kingdom.
The contract also allows for additional flexibility to establish health education facilities, which is consistent with the Fakih Group’s long history in medical education and training, potentially transforming the project into an academic and medical center serving the entire southern region.
Financial and operational impact
The company clarified that the deal will be financed through its own resources, reflecting the group's strong financial standing. The financial impact of the agreement is expected to begin to materialize upon completion of construction and the commencement of commercial operations at the hospital. This structure (leasing the land instead of purchasing it) is a prudent move that allows the company to focus its capital on construction and equipping the facility with state-of-the-art medical technology, rather than tying up liquidity in real estate assets.
