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Leejam seeks payoff for forced closure of Riyadh gyms

A man works out at a Fitness Time Xpress. Leejam runs 170-plus gyms in Saudi Arabia and the UAE Leejam Sports Company
A man works out at a Fitness Time Xpress. Leejam runs 170-plus gyms in Saudi Arabia and the UAE
  • Gyms on land needed for Diriyah Gate giga-project
  • Fitness company to write off $3m of assets
  • Leejam in talks with Saudi authorities over restitution

Leejam Sports Company is seeking compensation after being forced to close two of its gyms in Riyadh.

The shuttered Fitness Time centres are on land in the city’s Al Khuzama district, which has been earmarked for the $50 billion Diriyah Gate project.

In a filing to the Saudi Stock Exchange, Leejam said the two centres were closed last week and it would write off assets worth SAR11.4 million ($3 million) as a result. This will be reflected in its financial statements for the third quarter of 2023.

“The company is currently working on an agreement to try to compensate the company for the costs incurred by closing the two fitness centres with the relevant authorities,” Leejam added.

Under Article 5 of the Law of Expropriation of Real Estate for the Public Benefit and Temporary Seizure of Real Estate, the Diriyah Gate Development Authority can acquire land needed for the project.

The heritage and tourism giga-project is set to be home to 100,000 people and aims to attract 30 million visitors a year. It will include museums, retail space, restaurants and hotels.

Leejam, which runs more than 170 gyms in Saudi Arabia and the UAE, has also unveiled its first-half results. Revenue and net profit rose by 25 percent and 65 percent respectively compared to H1 2022, while membership numbers increased by 34 percent.

Revenue totalled SAR579 million and net profit hit SAR135 million. Men’s fitness centre continue to be the primary driver of growth.

Adnan Al Khalaf, the company’s CEO, said it was “well placed” for continued growth for the remainder of this year.