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A SAL facility
SAL Saudi Logistics Services Co. (SAL) signed a preliminary agreement with Sela Co. to lease a land plot spanning 1.56 million square meters (sqm) in Falcon City, Riyadh.
For more news and details on the projects
SAL intends to develop, construct, and operate a logistics zone on the land, according to statement to Tadawul.
The lease period spans 30 years, extendable by 15 years on mutual agreement, with a grace period of three years, and with estimated investments at SAR 4 billion.
The logistics zone will provide an integrated infrastructure combining modern Grade A warehouses, advanced operational facilities, multimodal connectivity, and smart technologies that contribute to improving operational efficiency and accelerating the flow of goods both locally and regionally.
The company would pay an annual rent of SAR 16 per sqm for the leased land, with an annual inflation adjustment of 1.5% applied throughout the lease term after the end of the grace period.
The company approved to pay a one-time, non-refundable fee of SAR 25 million upon signing the final agreement to allocate for electricity, road preparation, and other related infrastructure costs.
The grace period under the agreement will begin either from the date of land handover or from the date on which Sela notifies SAL—with a one-month notice—of the land’s readiness for handover, whichever comes later. Both parties are committed to finalizing the definitive agreement within six months from the date of signing the preliminary agreement, while adhering to the above-mentioned financial terms.
SAL intends to expand the scope of its operations by establishing a logistics zone, which will serve as a new source of revenue and is expected to have a positive impact on its financial results in the coming years once the project is complete and operational.
The company also noted that it is currently finalizing studies related to the construction and development of the logistics zone while seeking appropriate financing for the project. It will announce any material developments in due course.
Additionally, SAL announced signing a framework agreement with the Shareek Program to obtain support for the Falcon City Logistics Zone project, the company said in a separate statement on Tadawul.
The agreement outlines the eligibility criteria for SAL as regards applying for enablement programs related to the Falcon City Logistics Zone project. It also clarifies SAL’s eligibility to fulfil the related requirements in accordance with the terms of the framework support agreement.
The eligibility commitments are set to expire on Dec. 31, 2030. SAL confirmed that there is no financial impact on its ongoing projects, noting that no related parties are involved in this agreement.
SAL logistics zone facility in Falcon City
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