Umm Al Qura for Development & Construction Company (Masar) has signed a non-binding memorandum of understanding (MoU) to set up a 221 million Saudi riyal ($58.93 million) real estate fund to develop a hotel at Masar Destination, a mixed-use development in Makkah.

The private fund will be established as a joint venture between Al-Inma First Development Company, a special-purpose vehicle for Masar-owned Al-Inma Makkah Development Fund I, BIM Capital, and Ajbal Real Estate Development, Masar said in a statement to the Saudi stock exchange.

The fund’s value includes the land cost and part of the development cost, which will be injected via cash, in-kind contributions and subscriptions.

BIM Capital will act as the fund manager, while Ajbal will serve as the project developer. Al-Inma First Development will contribute the land plot partially as an in-kind contribution. 

The final ownership stakes of the three parties will be determined upon the fund’s establishment, the statement added.

The MoU is valid for six months from the date of signing or until the completion of the fund’s establishment, whichever comes first. An extension is possible on mutual written consent, the statement said.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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