Latest news with #ArabianCentresCo
Argaam
17-03-2025
- Business
- Argaam
Cenomi Centers sees strong footfall, occupancy rate: CEO
Alison Rehill Erguven, CEO of Arabian Centres Co. (Cenomi Centers), said the company continues to maintain a positive momentum, having experienced an outstanding period overall with record-level footfall, increased occupancy and revenue growth, and improved profitability. Erguven told Argaam that the decline in Q4 2024 net earnings was due to one-time transactions, such as land sale gains realized last year, as well as an increase in impairment loss this year from a more cautious credit loss approach. She added that the increase in the occupancy rate to a record 94.4% positively impacted the company's operational returns. This reflects solid demand for retail spaces, enhances footfall, and supports an improved retail mix with high-quality tenants. Revenue growth is expected to accelerate in the communing period, and the high occupancy rate would boost the company's asset quality and evaluation, supporting stronger long-term performance. Both Jawharat Jeddah and Jawharat Riyadh are making great progress, with the structural completion rates stand at 94% and 92%, respectively. Here are details of the interview: Q: Cenomi Centers' profits declined to SAR 350 million (after minority interest) by the end of Q4 2024, compared to SAR 506.5 million in the same period of 2023. What is your comment on these results? A: We continue to maintain a positive momentum, having experienced an outstanding period overall with record-level footfall, increased occupancy and revenue growth, and improved profitability. It is important to note that full year 2024 net profit are not directly comparable to the same period in the previous year due to certain one-off transactions. Specifically, the SAR 238.7 million land sale gain in 2023 and the one-time SAR 87.5 million increase in impairment loss this year from a more cautious credit loss approach. When we adjust for these, our net profit actually grew by 12.3% year-on-year, providing a more accurate view of our underlying performance. Regarding Q4 2024, our operating expenses dropped 25% compared to Q4 2023. The decline in net profit after minority interest is due to higher finance expense and lower fair-value gains on our investment properties. The increase in finance expense reflects our near-peak investment phase, with significant capital allocated to our two flagship development projects. Overall, I am very pleased by our operating and financial performance. We delivered on revenue growth and footfall performance, which highlight the resilience of our business. Q: Revenue increased by 7.5% year-on-year in Q4. What were the key factors driving this growth? A: There are three elements to this solid performance. The main drivers of growth were the increase in Media sales , Other revenues, and the increase in occupancy. However, I'd like to emphasize the 2.5% growth in net rental revenue. That is the result of our strategic focus on optimising the tenant mix and improving the overall customer experience which led to stronger performance in leasing and footfall We remain confident that there is significant potential to further enhance revenue per square meter across our portfolio. Q: How did the increase in occupancy rate to 94.4% impact operational returns? A: The increase in our occupancy rate to a record 94.4% positively impacted our operational returns.. It reflects solid demand for our retail spaces, enhances footfall, and supports an improved retail mix with high-quality tenants. This not only drives more consistent cash flows but also positions us to benefit from future rental escalations, reduced reliance on incentives, and greater upside from turnover-based rents, ultimately strengthening overall operational performance. Q: What was the effect of higher occupancy rates on rental revenue compared to the previous year? A: Despite the higher occupancy rates in 2024, our rental revenue grew 0.7% to SAR 2.1 billion. This slight growth is attributed to the resilient approach that we adopted in setting rental rates during 2024 to improve our occupancy rates, primarily in B and C malls. This approach will positively impact rental revenues in 2025 through the annualization effect of the deals signed during 2024. With a stronger occupancy base, improved tenant mix, and potential uplift from turnover-based rents, revenue growth should accelerate in upcoming periods. Additionally, higher occupancy enhances asset quality and valuation, supporting stronger long-term performance. Q: What is the current development status of the Jawharat Jeddah and Jawharat Riyadh projects as of the end of 2024? A: As of the end of 2024, both Jawharat Jeddah and Jawharat Riyadh are making great progress. The structural completion levels for both projects stand at 94.0% for Jawharat Jeddah and 92.0% for Jawharat Riyadh. These developments are on track, with Jawharat Jeddah expected to be completed by December 2025 and Jawharat Riyadh by April 2026. These projects are set to become iconic retail destinations in their respective cities and are expected to drive significant footfall and revenue once they are operational. Q: Net debt rose to SAR 11.5 billion in 2024. How does the company plan to manage this amid ongoing expansions? A: The increase in net debt is primarily due to our ongoing flagship developments, Jawharat Riyadh and Jawharat Jeddah, which are currently in their peak investment phase. However, we view this increase as a necessary step in our long-term growth strategy, as these projects are expected to generate significant EBITDA of SAR 650mn once stabilized, contributing an additional 40% to Cenomi Centers' current EBITDA. We are confident that the returns from these developments will more than justify the increased debt levels. In the meantime, we continue to manage our debt carefully, balancing short-term financing needs with our long-term profitability goals.
Argaam
18-02-2025
- Business
- Argaam
Cenomi Centers receives SAR 200M for Sahara Plaza sale
Arabian Centres Co. (Cenomi Centers) received cash check for the sale value of Sahara Plaza Center in King Fahd district, Riyadh, from the purchaser, Alistithmar Capital. In a statement to Tadawul, Cenomi Centers pointed out that the deal was part of the company's strategy to implement its program to sell non-core assets, with the aim to restructure the investment portfolio and focus on investments that are in line with the company's strategic direction. The proceeds from this transaction will be utilized to enhance liquidity and support the company's financial position, contributing to improved financial performance and strengthening future expansion and growth plans, the statement added. In February, Cenomi Centers completed a sale deal for the Sahara Plaza Center, spanning a total area of 12,540 square meters, for approximately SAR 200 million. The deal value excludes the real estate transaction tax and brokerage fees, Argaam reported.
Argaam
06-02-2025
- Business
- Argaam
Cenomi Centers to hand over Dhahran Mall's phase 1 on Feb. 9, expects to add SAR 49M in net profit
Arabian Centres Co. (Cenomi Centers) announced that it will hand over the first phase of Dhahran Mall in the Eastern Province on February 9, 2025. In a statement to Tadawul, the company said that this is in accordance with the agreed-upon contract terms, which stipulate that the land and building will be handed over to the landlord upon the lease expiry date, which is February 9, 2025, while the contract of the second phase of the mall is set to expire in April 2026. The company opened the first phase of Dhahran Mall in 2005 under a lease agreement for 20 Hijri years, with a leasable area of about 82,000 square meters. The second phase, which was leased under a separate lease agreement, was opened in 2006 with a leasable area of approximately 80,000 square meters, according to the statement. Based on initial estimates, the company expects the financial impact of the lease expiry for the first phase of Dhahran Mall to be a decline in revenues by nearly SAR 139 million compared to 2024, as well as an improvement in net income by approximately SAR 49 million, driven by a reduction in fair value revaluation losses for Dhahran Mall compared to 2024. Cenomi Centers also expects the related financial impact to materialize starting from the Q1 2025. According to the 2025 plan, the financial impact resulting from the expiration of the lease for the first phase of Dhahran Mall is expected to be offset through several initiatives. These include the growth of the " U Walk Jeddah" project, which was inaugurated in February 2024 and is expected to reach operational stability by 2025. The company also aims to boost the operational performance of its centers by increasing average occupancy rates and increasing revenues from non-leasable spaces, including advertising sales, kiosks, and other sources of income, the statement added. Cenomi Centers also indicated that, as part of its expansion strategy, which aims to strengthen its presence across various regions of the Kingdom in line with the latest standards and the evolving needs of consumers and retail businesses, its previously announced the signing of a lease and investment agreement for a 300,000 square meter plot of land in North Khobar, Corniche District, for a period of 30 years. This project aims to develop " Jawharat Al- Khobar", alongside multi-purpose commercial facilities. The development is expected to add more than 100,000 square meters of leasable area.
