Saudi-listed Dar Al Majid Real Estate Company announced on Sunday that it has signed a tri-partite investment agreement for developing a mixed-use project in Riyadh with a potential value of 1 billion Saudi riyals ($267 million).

The company said in a stock exchange statement that it signed the agreement with Jadwa Private Real Estate Investment Fund No. (47), managed by Jadwa Investment and landowner Abdullah bin Mohammed Al-Qassim, to jointly develop the project, located on King Salman Road adjacent to the SAB station in the Saudi capital.

Under the agreement, Dar Al Majid will act as the exclusive developer of the project, which will be built on a plot of 8,087.96 square metres (sqm).

The land, valued at approximately SAR 259 million ($69 million), will be contributed to the fund as an in-kind share.

The real estate company also retains an optional right to subscribe in the fund with a cash contribution of up to SAR 50 million.

A separate development agreement will be signed after the completion of the in-kind contribution and fund procedures.

The SAR 1 billion development cost is a preliminary estimate pending completion of detailed technical studies and regulatory approvals.

Early design concepts indicate the project will feature over 350 residential units, along with commercial, administrative, and office spaces exceeding 20,000 sqm, the statement ntoted.

Under the current framework, it said, Dar Al Majid Real Estate will receive:

  •  15 percent development fee
  •  25 percent performance incentive
  •  2.5 percent sales commission

The company may also earn additional investment returns if it exercises its SAR 50 million subscription option.

The financial impact of the agreement will appear following the final structuring of the fund and the commencement of the project’s development phases.

Dar Al Majid said the partnership marks an important step in its strategy to expand through partnerships with landowners and specialised investment funds, aligning with its goal to diversify its portfolio and reinforce its position in Saudi Arabia’s evolving real estate market.

(Writing by SA Kader; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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