Shams to invest SAR 244M in SEDCO Capital-managed fund

Tourism Enterprise Co.’s (Shams) board of directors decided today, Oct. 28, to pump SAR 243.8 million in investments through a closed-end private equity fund managed by SEDCO Capital and licensed by the Capital Market Authority (CMA).

The fund will develop a five-star Fairmont hotel at Ajdan Waterfront, located along Al-Khobar’s Corniche. Shams expects the investment to have a positive financial impact, aligning with its growth strategy, Shams said in a Tadawul filing today, Oct. 28.

These investments will launch in November 2024, spanning seven years. The SEDCO Capital-Ajdan Fairmont fund, having SAR 295 million in capital and Ajdan Real Estate Development Co. as a developer, projects a 12.26% internal yield.

Under its terms and conditions, the fund should be sized at SAR 445 million after sourcing SAR 150 million from the Tourism Development Fund, with the remaining SAR 295 million to be secured from investors.

The fund aims to develop a five-star hotel on a 6,827-square-meter (sqm) beachfront plot, with a 33,917-sqm built-up area. The 36-floor hotel will offer 160 rooms and suites, overlooking Al-Khobar Corniche in Ajdan Waterfront.

Construction has reached 26 floors. Shams aims to capitalize on Saudi Vision 2030’s push to boost tourism and attract 100 million annual visitors by 2030, in line with its board's expansion goals to partner with global firms and increase shareholder returns.

This move supports Shams' direction per its rights issue prospectus approved in November 2022, which targets hospitality investments. The company will update on future developments in due course.