SAL to build a SAR 4 bn logistics zone in Riyadh: SAL Saudi Logistics Services announced plans to construct, develop, and operate a new logistics zone in Riyadh’s Falcon City at an investment of SAR 4 bn, according to a statement (pdf). The logistics player also inked a preliminary agreement to lease a 1.5 mn sqm plot of land from PIF’s entertainment and investments arm Sela to develop the logistics zone in Falcon City, according to a Tadawul disclosure.

The lease breakdown: Under the lease 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 front electricity, access roads, and infrastructure costs. 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 6 months.

Who’s involved: Sal also separately inked a framework agreement with the 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.

REMEMBER- SAL just had a good year: SAL logged a net income of SAR 661 mn in 2024, up 30% y-o-y. The improved performance came on the back of growth in volumes and cost savings. Meanwhile, revenues were up 12% at SAR 1.6 bn on the back of solid results across the firm’s divisions despite geopolitical challenges.

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.

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