The Red Sea Development Company (TRSDC), the developer behind the world’s most ambitious regenerative tourism project, has announced that it has entered into a joint venture (JV) agreement with Almutlaq Real Estate Investment Company (AREIC), a subsidiary of the Al Mutlaq Group (AMG).
Under the agreement, valued at over SR1.5 billion ($400 million), the two companies will develop Jumeirah The Red Sea, a 159-key luxury resort situated on the Red Sea destination’s hub island, Shura, currently under construction and expected to open in early 2024.
Shura Island forms part of the first phase of development, and will comprise 11 luxury, premium and lifestyle hotels and resorts, residential units, a championship golf course, a 118-berth marina, and a comprehensive retail, dining, and entertainment offering.
The strategic partnership marks the first JV established by TRSDC and demonstrates the private sector’s confidence in the future success of the Red Sea destination, said the company in a statement.
“We are delighted to partner with Al Mutlaq Group, a prominent global investment family group in Riyadh. The formation of a joint venture with their subsidiary, AREIC, demonstrates growing interest from the investment community to participate in our journey and is an encouraging reflection of their belief in not only our project but the wider tourism opportunity in the Kingdom,” said John Pagano, CEO of TRSDC.
“This joint venture investment reinforces the private sector’s alignment with our commitment to regenerative tourism and sustainable development. Our project naturally lends itself to promising business opportunities, with the ability to leverage the Kingdom’s key strategic assets, and drive economic growth and diversification as outlined by Vision 2030,” he added.
AREIC Chairman Tariq Almutlaq said: “We are extremely pleased to partner with TRSDC and its best-in-class management team on this exciting and compelling project. We have been studying the giga projects for some time, and the Red Sea is achieving its vision. The destination is coming to life, and we look forward to welcoming our first guests in 2024.”
While funding for Phase One of The Red Sea Project is secured and in place, the joint venture with AREIC highlights the strong interest and appetite from the private sector to participate and invest in Vision 2030, according to TRSDC.
The Saudi developer stated that it is in parallel discussions with several other investors under a similar framework to invest in The Red Sea Project’s commercial assets, including hotels and resorts, leisure, and retail and dining experiences.
Moreover, Amaala and additional soon-to-be-announced projects in the developer’s expanding portfolio bring with them additional opportunities for investors, it added.
TRSDC and Amaala have awarded over 1,000 contracts worth in excess of SR25 billion. Work is on track to welcome the first guests in early 2023, when the first hotels will open, with the balance of Phase One set to complete by early 2024.
“The success of our project delivery team is speaking volumes, building our reputation in the market as investors see tangible progress being made and our destination coming to life, said Jay Rosen, Chief Financial Officer at TRSDC.
“The investment community has strong appetite and interest in our project, and we anticipate the announcement of additional joint ventures. We are attracting an abundance of third-party investment interest, particularly those focused on ESG who are confident that this is an exciting opportunity and one that they do not want to miss out on,” he added.
The announcement follows TRSDC achieving financial close on its SR14.12 billion green financing earlier this year with four leading Saudi banks (Banque Saudi Fransi, Riyad Bank, Saudi British Bank, and Saudi National Bank).
As the first-ever Riyal denominated green financing, TRSDC was acknowledged with an award for Project Finance Deal of Year in the Capital Markets Saudi Arabia Awards 2021 as well as the Best New Green Loan Financing Project Award at the International Finance Awards 2022.
The Red Sea Project has achieved significant progress on the ground, with Phase One now more than 50 per cent complete and several key assets already fully operational, including a four-star management hotel, on-site offices, and the largest landscape nursery in the region, said TRSDC.
Upon completion in 2030, The Red Sea Project will comprise 50 resorts, offering up to 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites. The destination will also include an international airport, luxury marinas, golf courses, entertainment, and leisure facilities.
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