Saudi Arabia’s first sukuk savings round for February closes at $229.5m

Cenomi Centers secures $1.39bn Shariah-compliant, sustainability-linked financing

RIYADH: Saudi Arabia’s lifestyle and leisure sectors have been infused with SR5.25 billion ($1.39 billion) after mall operator Cenomi Centers secured financing for the “next generation” of retail experiences.

The firm’s Shariah-compliant, sustainability-linked funding agreement with a syndicate of top-tier banks is set to deliver a new take on retail within the Kingdom, the company’s CEO told Arab News in an interview. 

Alison Rehill outlined that this will entail new flagship assets, encompassing personal shopping experiences, luxury pavilions, and concierge services, all of which will be enabled through an immersive digital setting. 

The CEO said: “These flagship assets are truly the first of their kind in the Kingdom. This will mean a number of unique features and offerings that bring next-generation retail experiences to Saudi consumers, including luxury pavilions with elevated service levels such as concierge, valet, and personal shopping … all in a digitally enabled immersive setting.”

According to a company release, HSBC Saudi Arabia led the syndication arrangement, with participation from Saudi National Bank, Saudi Awwal Bank, and Arab National Bank, as well as Commercial Bank of Dubai, Mashreq Bank PSC, and Qatar National Bank.

The new arrangement consists of a twelve-year term sustainability-linked Murabaha facility in two tranches and a revolving four-year renewable Murabaha facility.

According to the executive, through this agreement, the new structures will benefit from improved pricing and covenant packages compared to existing arrangements, adding that this access to advantageous financing terms will support the company’s balance sheet and ability to deliver on its growth pipeline. 

Furthermore, it will aid in contributing toward existing facility repayments and underpinning the company’s capital strategy. 

This was evidenced by the recent completion and opening of U Walk Jeddah and further developments under construction, including Jawharat Riyadh and Jawharat Jeddah.

The Jawharat expansions, expected to open in the first half of 2025, will add over 280,000 sq. m. of luxury offerings to the Kingdom and the region. 

The release noted that once stabilized, the assets are anticipated to contribute a material incremental amount to Cenomi Centers’ revenue and deliver curated lifestyle experiences to the Kingdom in partnership with some of the world’s “most iconic brands.”

In addition to its developmental potential, the transaction carries a number of sustainability-linked stipulations, which Rehill noted “offer the company incentives in terms of improved pricing for meeting sustainability targets.”

She added that these specifically include a carbon emissions reduction target, increasing the percentage of assets connected to the grid, and bolstering the number of women in leadership roles. 

The executive highlighted a number of initiatives the company has in place to meet the outlined targets. 

Among these is a recent signing of a power purchase agreement involving a joint venture between Marubeni Corp., a major Japanese integrated trading and investment business conglomerate, and FAS Energy, a Fawaz Alhokair Group subsidiary focusing on solar and renewable energy.

This PPA encompasses the deployment of solar panels across Cenomi’s portfolio “over the next couple of years,” including on mall roofs and car parks.

The CEO outlined that this demonstrates the “positive direction” that the company is heading in as it pertains to the fulfillment of its environmental, social and governance strategy.

She said: “This will have a material impact on our electricity costs when completed. In addition, the flagship Jawharat projects in Riyadh and Jeddah are both being built to meet LEED Gold certification for Green Buildings.”

She added: “We aim for sustainability to be integrated into every part of Cenomi Centers. This is demonstrated through the ECCO framework, which is central to the company’s Environment, Social and Governance strategy. The framework is aligned with the national sustainability agendas such as the Saudi Vision 2030 and the Saudi Green Initiative.” 

In addition to providing the company with fiscal agility, the arrangements “tie closely” with the developer’s vision of creating and maintaining a business model that offers a positive, lasting impact on the communities and landscape in which it operates, Rehill concluded.

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