Barwa Real Estate has announced that Lusail Golf Development Company, fully owned by Barwa Group, has reached an agreement to sell two land plots in Lusail with a total area of 3.47mn sq m.
The total agreed selling price is QR6.36bn to be collected over the period from the date of completing the sale to the second quarter of 2024. The full proceeds from the sale will be used to settle financial obligations within the group.
It is targeted to complete all necessary procedures for the sale process during the third quarter of 2023. Lusail Gulf Company purchased the land plots in 2010 and 2014.
The book value of these plots is QR5,890mn as shown in the consolidated financial statements as at March 31, 2023. The group has recorded valuation losses related to the same plots amounting to QR522mn in the net fair value gain on investment properties in the consolidated financial statements of the company in 2022.
The estimated profits from the sale transaction will be announced after the completion of the sale and transfer of ownership to the buyer, in order for the group to calculate all costs and expenses related to the land.
The sale transaction is part of Barwa’s strategy to divest from non-performing assets, which allows for a reduction in financial obligations and financing costs, which have recently seen a significant increase in global markets.
This will have a positive impact on the group’s cash flows, financial position, and financial indicators. It also contributes to directing operating cash towards developing the income-generating investment portfolio and achieving sustainable growth in shareholder returns.
