Fakeeh Care signs SAR 218M long-term land lease pact in Jazan

Dr. Soliman Abdel Kader Fakeeh Hospital Co. (Fakeeh Care) and its subsidiaries signed an agreement on Jan. 1 with Oloof Development Co., a wholly owned subsidiary of Jazan Municipality, to lease a strategic land plot in Jazan City.

The 34,581-square-meter site will be used to develop an integrated healthcare facility under a 50-year lease valued at SAR 217.99 million (excluding VAT), the company said in a statement to Tadawul.

The lease can be renewed for an additional 25 years at market rates, with the option to extend for another 25 years if Oloof Development remains as the lessor.

Fakeeh Care said it will construct and operate the healthcare facility throughout the lease term and any extensions, under a build–operate–transfer (BOT) structure.

Lease payments include a one-time payment of SAR 1.73 million upon signing, followed by a rent-free grace period during the second and third years; SAR 13.92 million payable from the fourth through the 10th year and SAR 202.34 million payable from the 11th through the 50th year.

The land may only be used for the establishment, operation, and maintenance of a healthcare facility and related supporting services, Fakeeh Care said.

Any other use requires the lessor's prior approval, the statement said.

The agreement also allows for the addition of health education services or programs, subject to obtaining the necessary approvals from the relevant authorities.

The company added that it will secure all required licenses and approvals to commence project implementation by the end of the grace period (end of the third year).

The transaction will be funded through Fakeeh Care’s internal resources, with the first annual lease payment made upon handover of the land.

The lease will be recognized in the company’s financial statements in line with the International Financial Reporting Standards (IFRS) adopted in Saudi Arabia by the Saudi Organization for Chartered and Professional Accountants (SOCPA).

Fakeeh Care expects the financial impact of the agreement to begin once the medical facility is completed and operational.

The company will disclose any material developments and the expected financial impact in due course.

The healthcare operator explained that the long-term lease secures a prime coastal site for a hospital in the Al Shati district, an area experiencing rapid development in Jazan and surrounding regions.

The project is supported by increasing demand for high-quality healthcare, population growth, and an expanding insured base linked to workforce inflows, driven by industrial and infrastructure projects.

The lease structure allows project development without land ownership, enabling disciplined capital allocation toward construction, fit-out, and phased operational rollout, the statement added.

Additionally, the agreement provides flexibility to add a health education facility on the same site, aligning with the group’s plans for geographic expansion and enhancing services in areas where it has a strong presence, the company stated.