Jarir Marketing sells office building in Al Khobar for SR178mln

Jarir Marketing Company announced selling its building, located in Al Rakah Al Janoubia district in Al Khobar Governorate. The building, sold for SR 178 million, consists of eight floors, and includes residential, commercial and office areas, in addition to Jarir Bookstore showroom.

Transaction Terms:

1. Sale price: (178,000,000) one hundred and seventy-eight million Riyals, excluding real estate tax.
2. Jarir Marketing Company (the seller) is to lease back the showroom designated as Jarir Bookstore, of an area ​​(4,101) square meters, for a period of twenty-five years, including non-cancellable seven years, For an annual rent of (3,444,840) riyals, with an increase of (5%) every five years.

Parties of the Transaction:

1- Jarir Marketing Company (the seller).

2- One of Riyad Capital Funds (the buyer).

Transaction reasons:

1. The sale is consistent with the company’s current strategy to disposal of large real estate and focus on the company’s main activity.
2. The sale achieves a better return for the company than maintaining its ownership of the real estate, as it will result in an improvement in the in the retern on the company’s assets.

Expected Impact of the Transaction on the Company and Its Operations:

1- The cessation of rental income from the property.

2- Cessation of the depreciation of the property .

3- Payment of rent for Jarir Bookstore showroom .

4- Using the proceeds of sale in the company’s activities, which is expected to improve return on the company’s assets.

5- Recognition of capital gain of around SAR 10 million (adjusted for the unrecognized postion related to the right of use of the showroom being leased back).