Jarir Marketing Company announced the sale of its 8-storey building, owned by it, located in Al Rakah Al Janoubia District, Al Khobar Governorate.
Jarir Marketing said in a statement on “Saudi Tadawul”, today, Wednesday, that the value of the deal amounts to about 178 million riyals, excluding real estate tax.
She added that the contract includes the re-lease of the Jarir Marketing Company (the seller) the exhibition dedicated to Jarir Bookstore, which has an area of 4,101 square meters, for a period of 25 years, including 7 years binding on the seller, with an annual rent of about 3.44 million riyals, an increase of 5% every 5 years.
It clarified that the buyer is a fund of Riyad Capital.
The book value of the asset subject of the transaction is about 166.4 million riyals.
She pointed out that the sale is in line with the company’s current strategy of getting rid of large real estate and focusing on the company’s main activity, and the sale achieves a better interest for the company than maintaining its ownership of the property, as it will result in an improvement in the rate of return on the company’s assets.
She explained that the financial impact of the deal on the company is to stop the rental income from the property, stop calculating the depreciation of the property, and start calculating the rent for the exhibition rented for the use of Jarir Bookstore.
The proceeds of the sale are also used in the company’s activities, which is expected to improve the return on the company’s assets, in addition to achieving a capital profit of about 10 million riyals, after excluding the profit related to the right to use the exhibition as a result of re-lease.
The proceeds from the sale will be used to finance the company’s operating activities.
