Arabia Signs Concession Agreement for Billboards in Masar Masterplan, Makkah

Arabian Contracting Services Co. made a significant announcement on Thursday, March 28, 2024, regarding the signing of an advertising concession agreement with Umm Al Qura Development and Construction Company. This agreement grants Arabia the rights to install and operate billboards within the renowned Masar masterplan in Makkah Al-Mukarramah, spanning a lengthy 15-year term from the date of signing.

Masar Makkah stands as a pivotal development project within Makkah Al-Mukarramah, covering an expansive area exceeding 1.2 million square meters. It embodies an urban hub with an integrated investment system situated at the heart of the Holy Capital. The vision for Masar Makkah revolves around serving the population of Makkah Al-Mukarramah and its visitors, aiming to establish destinations with a refined and exemplary design while honoring the culture and authenticity of the Holy City. Masar Makkah also aims to foster a new and diverse investment base with high-quality standards, enriching the local product, bolstering the economy of the Makkah Al-Mukarramah region, and aligning with the goals of Saudi Arabia’s Vision 2030.

The agreement entails the installation of 315 fully digital billboards of various types and sizes, strategically positioned across different areas. This includes 34 billboards on bridges and tunnels, along with 80 billboards on internal elevators. It is noteworthy that the number of billboards may increase following the acquisition of necessary approvals from relevant parties.

The revenue model outlined in the agreement involves a revenue-sharing mechanism or an annual minimum guarantee, whichever amount is higher, structured as follows:

Revenue sharing of a certain percentage with Umm Al Qura Development and Construction Company without applying the annual minimum guarantee for the first four years of the agreement.

Revenue sharing of a certain percentage with Umm Al Qura Development and Construction Company or the annual minimum guarantee, whichever is higher, from the 5th year until the end of the agreement.

The revenue-sharing percentage with Umm Al Qura Development and Construction Company is subject to the terms and conditions of the agreement.

The total annual minimum guarantee amount from the 5th year until the 15th year stands at SAR 252,612,655, to be progressively distributed over the 11-year period as per the agreement terms.

The company anticipates the financial impact of this agreement to be reflected in its results starting from the 1st quarter of 2025.