Saudi-based Asas Makeen Real Estate Development and Investment Company said it had signed a real estate development agreement with BLOM Real Estate Investment Fund XII, managed by BLOM Invest Saudi Arabia, to develop a residential project in Riyadh.

Under the agreement, Asas Makeen will serve as the project development manager for the scheme in the Al Narjis district, overseeing the project's management, development and execution.

It will come up on a 16,620.59-sq-m area featuring about 290 residential units, said Asas Makeen in its filing to the Saudi stock exchange Tadawul. The entire contract will be completed in 18 months. 

The estimated cost of executing the project, including development management fees, is SAR132 million ($35.2 million), excluding value-added tax, it stated.

Asas Makeen said the project forms part of a strategy to expand its real estate development business through partnerships with landowners and investment funds while diversifying its revenue streams and strengthening its presence in the Saudi residential market. As per the deal, the company will receive development management fees of SAR11.2 million, excluding VAT.

The company will also invest SAR15 million in the fund through the subscription of 14,958 investment units, in line with the agreement and related definitive documents.

The investment fund will have a target size of about SAR303 million ($80.8 million), it added.

Asas Makeen said it expects the agreement to have a positive impact on its financial results over the project period, subject to construction progress and the fulfilment of contractual conditions.