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The Saudi Ports Authority (Mawani) has drafted regulations (pdf) that aim to regulate its relationship with investors and tenants of shipyards, warehouses, and industrial, commercial and residential facilities. The ports authority is seeking feedback from stakeholders until Tuesday, 27 February on the government’s survey platform Istitlaa.
The pitch: The proposed regulations aim to attract investors to the local logistics industry by providing detailed information about available leasing options, procedures and requirements, and the contractual obligations of both investors and the authority. They also make clear Mawani wants to work on value-added projects.
Two types of leasing: Investors can place requests for direct leasing on the official e-services platform if they want to lease assets that will not be used to provide services to clients. Meanwhile, assets that can be used for providing services are put up for grabs by investors through public bidding.
Bank guarantees would be required: Investors will be required to provide bank guarantees worth 100% of the annual rent value for the first year of the contract, and in case of renewal, the guarantee will have to cover 100% of the full duration of the contract plus an additional six months. Entities that are majority owned by the government are exempt from this requirement.
Leasehold improvements are okay: Investors can apply to make adjustments or improvements to the assets they want to lease, and if approved, they will be exempt from paying rent for a period of up to five years, depending how much they’ll be sinking into leasehold improvements.
Pricing remained unchanged: Leasing prices for land plots range between SAR 2 and Sar 74 per sqm depending on distance from the port and the shipyard. The most expensive spots are those at Jeddah Islamic Port and King Abdulaziz port in Dammam, while the least costly are located at King Fahd industrial port and Ras Al Khir port in the Eastern Province.
The caveat: Mawani has the option to raise the value of the leasing contracts by a maximum of 5% every five years.
