Arabian Centres Company, the largest owner, operator, and developer of shopping malls and complexes in Saudi Arabia, has reported strong financials for the first half and second quarter of the financial year 2023.
The company recorded increases in both revenues and net profit. The company reported solid revenue growth for the first half of FY2023 booking SAR1,136.7 million ($295m), with second quarter revenues reaching SAR573.7m ($152.52m), marking YOY increases in revenues of 13 per cent and 15 per cent, respectively.
Net profit climbed by an impressive 72 per cent YOY to book SAR 374.1m ($99.46m) for the first half, and SAR 246.4m ($65.7m) for the second quarter representing a YOY increase of 171 per cent, an almost three-fold surge.
The company’s strong performance was further boosted by several strategic business initiatives, including the Board of Directors’ recent approval for the commencement of a sale programme for non-core land assets valued at SAR 2bn ($531m). A land plot measuring circa 18,000 square metres in Riyadh was the first non-core asset sold as part of the programme.
Arabian Centres’ robust financial results run in parallel with the revival of Saudi Arabia’s retail sector as Covid-19 restrictions have been largely removed, allowing the wider mall and retail industries to capitalise.
Strategic initiatives to grow
In addition, Arabian Centres continues to focus on the development of its new generation of lifestyle experiences, with several flagship projects well under way.
These include the Jawharat projects in Riyadh, Jeddah, and Al-Khobar, which promise fully immersive lifestyle experiences uniting luxury retail, dining, and extensive entertainment offerings, marking a brand-new concept for the Kingdom.
The company has secured full financing for its recently launched Jawharat projects in Riyadh and Jeddah.
The conclusion of this funding agreement is a major milestone in the development of the flagship projects, coming on the back of two agreements signed earlier in 2022 with Riyad Capital, the investment arm of Riyad Bank, to establish two real estate investment funds for Jawharat Riyadh and Jawharat Jeddah.
Under the funding agreement, the equity portion of total assets under management for both projects is valued at SAR 4.4 billion. The remaining non-equity financing of SAR 2 billion has now been secured through a group of local banks.
Consumer and tenant confidence in the market
Footfall for FY2023 is approaching the levels seen during the last full pre-COVID year. Footfall for the first half of FY2023 recorded more than 57 million visitors across ACC’s 21 centres in Saudi Arabia, an increase of just over 42 per cent YOY.
In addition, tenant occupancy rates remain high, closing September at 94 per cent against the rate of 92 per cent reported for the same period the previous year.
Alison Rehilll-Erguven, CEO of Arabian Centres, said: “The company’s strong performance in both the first half and second quarter of the financial year is testament to the ability the organisation has demonstrated in remaining nimble, efficient, and resilient through the past two years,” reports Zawya.
“We continue to deliver on our strategic priorities, including solid initiatives such as the non-core asset sale program that will help us to generate SAR 2 billion of value to the company, as well as the conclusion of funds for two of our flagship Jawharat projects in Riyadh and Jeddah.
“These initiatives, together with the day-to-day value that we continually strive to offer our customers, partners and shareholders, ensures we remain both relevant and innovative in a rapidly transforming business and consumer landscape.”
In addition, UWalk Jeddah is the second of the Arabian Centres’ pioneering UWalk mall developments, which offer an open-air dining and retail environment, following on the unprecedented success of UWalk Riyadh.
Construction of a third UWalk location in Al-Qassim is underway, and both venues are due to open next year.