Taiba locks in SAR 2.4 bn Madinah hotels JV with Osool

Taiba locks in Madinah hotels JV with Osool: Taiba Investments is partnering with Osool Integrated Real Estate to develop and run three hotels in the central area of Madinah, according to a Tadawul disclosure out yesterday. The two sides are setting up a special-purpose company to handle the project, with a total investment ticket of SAR 2.4 bn, following non-binding talks that started back in November.

The details: Taiba will oversee the operation, refurbishment, and development of the hotels owned by Osool under a mix of local and international brands, bringing some 1.5k rooms into Taiba’s portfolio once they are up and running.

Taiba is putting in SAR 300 mn for its slice of the equity, with the rest of the financing coming from shareholders in proportion to their stakes as construction progresses. The hotels are set to start coming online in 2029.

Why it matters: Osool is the property management arm of the General Organization for Social Ins. (GOSI) and the landowner of Madinah. Taiba is benefiting from the JV instead of taking on massive debt to invest in a high-traffic tourism hub.

Taiba is heading into the project on solid topline footing. The company posted SAR 385.7 mn in revenues for 1Q, up 7.8% y-o-y, helped by stronger occupancy at its hotel and residential properties, higher visitor and Umrah traffic at its Makkah and Madinah assets, and the contribution from newly added properties, including the Rixos Obhur Jeddah Resort. However, net income slipped 5% y-o-y to SAR 124.8 mn, with the company pinning the dip to operating costs from the new additions.