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Sal Saudi Logistics Services plans to construct, develop, and operate a new logistics zone in Riyadh’s Falcon City, with an estimated investment of SAR 4 bn, according to a statement (pdf). The logistics player inked a preliminary agreement to lease a 1.5 mn sqm land plot from PIF’s entertainment and investments arm Sela for the project, it said in a Tadawul disclosure.
The lease breakdown: Under the agreement, Sal will lease the land for a period of 30 years, with the possibility to extend an additional 15 years and a grace period of three years. Sal will pay Sela SAR 25 mn to cover electricity, roads access, and infrastructure costs upon signing the final agreement for the zone. Sal is uptaking the land at a lease rate of SAR 16 per sqm, with an annual inflation rate set at 1.5% following the grace period. The two parties are scheduled to complete the final leasing agreement within six months.
Who’s involved: Sal also separately inked a framework agreement with government initiative Shareek program to support the project, according to a Tadawul disclosure and a statement (pdf). Under the agreement, Sal will be able to discuss its eligibility for and request empowerment programs from the government body. Shareek’s eligibility obligation is in effect until 31 December 2030. Further details regarding the partnership were not disclosed.
About the facility: The facility will include state-of-the-art Class A warehouses, operational facilities, multimodal connectivity, and smart tech. The project looks to boost the Kingdom’s supply chain efficiency and operational logistics environment. The zone comes as a new revenue segment for Sal, which is forecast to reflect on the firm’s earnings upon the project’s completion.
About Falcon City: The 14.4 mn-sqm city project is a next-generation city under the ownership of Sela and home to the Saudi Falcons Club, a cultural and heritage landmark in the Kingdom. The club boosts tourism and cultural engagement by hosting local and international events, as well as programs and activities.
