Knowledge Economic City (KEC), together with its subsidiary Algharraa International Real Estate Development Company Limited, has signed a Letter of Intent (LOI) with BSF Capital to establish and manage a closed-ended private real estate investment fund for the development of the Knowledge Gardens mixed-use project in Knowledge Economic City, Madinah.

The proposed development has an estimated total project cost of approximately SAR 7.5 billion and is expected to generate total revenues of approximately SAR 10.2 billion, based on preliminary feasibility studies and financial projections.

The proposed fund will be established through a partnership between Knowledge Economic City and Algharraa International Real Estate Development Company as co-investors and co-developers, Fourmen Investment Company as investor and lead developer, and BSF Capital as the proposed fund manager. 

Additional investors may also participate in the fund, subject to the final terms and applicable regulatory approvals.

Under the preliminary framework of the LOI, KEC and Algharraa are expected to contribute land valued at approximately SAR 1.66 billion to the proposed fund. 

The companies are expected to jointly receive SAR800 million in cash, representing part of the land value, while the remaining land value will be contributed as an in-kind contribution, representing approximately 39.9% of the fund’s equity. KEC and Algharraa will also be entitled to development management fees in their capacity as co-developers, subject to the definitive agreements.