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A Saudi consortium of First Avenue for Real Estate Development Company, Dar Al Majed Real Estate Company (Al Majdiah), and Rekaz Real Estate Company has been awarded the concession for East Hindawiyah Informal Settlement Redevelopment Project in Makkah by the Royal Commission for Makkah City and Holy Sites.
The East Hindawiyah project is located approximately 1.8 kilometres from the Holy Grand Mosque in Makkah and will comprise a mix of office, residential, retail, and hospitality components, interconnected through public spaces.
The project will be developed through a real estate investment fund structure managed by Jadwa Investment, consortium leader First Avenue said in a stock exchange statement.
The estimated cost of the project, including land acquisition and infrastructure development costs but excluding future superstructure development, is 2 billion Saudi riyals ($532.37 million), the statement said.
The project spans a land area of approximately 235,000 square metres (sqm) with a floor area ratio (FAR) of 3.
The statement said the consortium is expected to earn development fees of approximately 10 percent of the development cost, in addition to a performance incentive linked to returns exceeding the fund’s target Internal Rate of Return (IRR) of 8 percent, as well as brokerage fees of 2.5 percent of the project’s sales value.
The project is owned 45 percent by First Avenue and 35 percent by Dar Al Majed Real Estate Company while Rekaz Real Estate Company owns 20 percent.
The redevelopment of informal settlements in Makkah is among the Kingdom's most important national initiatives aimed at enhancing residents' quality of life and enabling sustainable urban development, in alignment with the objectives of the Informal Settlements Development Programme and Saudi Vision 2030, according to the statement.
The statement didn’t disclose concession details or a timeline for completion.
(Writing by Majda Muhsen; Editing by Anoop Menon)
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