Saudi Arabia’s Knowledge Economic City Company (KEC) has announced that it had signed an agreement with Dar Almajed Real Estate Company (Almajdiah) and Capital Hill for the development of a new residential project in Madinah at an estimated cost of SAR2.8 billion ($738 million).
Spanning over a 97,000 sq m area within Knowledge Economic City, the project will boast around 2,700 residential apartments as well as 8,000sq m of net leasable commercial space and 3,500 parking spaces. It is expected to generate more than SAR4 billion in revenue, said KEC in its foiling to Saudi bourse Tadawul.
Under the proposed structure, the project will be owned and financed through a closed-ended real estate investment fund, with KEC holding 80% of the fund units and Almajdiah 20%.
As per the deal, KEC will contribute the project land, initially valued at about SAR875.4 million, while Almajdiah will contribute cash and serve as development manager. Capital Hill will establish and manage the fund, subject to regulatory approvals and definitive agreements.
KEC will receive SAR89 million in cash from Almajdiah and fund units valued at SAR786.4 million for the remaining value of the land. Almajdiah’s total contribution is expected to be about SAR200.7 million, it stated.
The memorandum includes a 90-day exclusivity period during which the parties will conduct due diligence and negotiate definitive agreements. The terms remain preliminary and are subject to final design, regulatory requirements and completion of the agreements.
The project is expected to target expats, in line with Saudi Arabia’s recently enacted law governing real estate ownership by non-Saudis.
The development will form part of a wider interconnected district within Knowledge Economic City, alongside projects including Multaqa Al Madinah 1 and 2, Multaqa Residences and Multaqa Hospitality, said the statement.
KEC said the developments are intended to create a mixed-use district comprising residential, hospitality, retail, office, entertainment and cultural facilities. It forms part of its strategy to accelerate development of its land bank through partnerships with specialised developers and institutional investment structures, it added.-TradeArabia News Service
