Knowledge City sells 3 land plots for 398.8 million riyals.. and achieves a gross profit of 360.8 million riyals

Logo of Knowledge Economic City Company

Knowledge Economic City Company signed last Thursday two agreements to sell 3 land plots located within the Knowledge Economic City project in Madinah, with a net total value of 398.8 million riyals, excluding real estate transaction tax, sale registration fees, or any other government fees.

The company added in two separate statements on Tadawul that these two transactions are expected to generate a gross profit of 360.8 million riyals, before deducting any expenses, fees, or obligations related to completing the transactions.

It explained that the first agreement includes the sale of two land plots numbered (C06-6) and (C06-3), with a total area of 17.62 thousand square meters, at a net total value of 229.12 million riyals.

It stated that the agreement was signed with both Al-Bawaba International Investment Company and Olo Real Estate Company, for the purpose of developing a mixed-use project through the establishment of a dedicated real estate investment fund.

It mentioned that the book value of the land subject to the transaction in the company's records is 21.61 million riyals, expecting the transaction to generate a gross profit of 207.52 million riyals, before deducting any expenses, fees, or obligations related to completing the transaction.

It said that the second agreement includes the sale of land plot No. (C10-28) located within the Knowledge Economic City project, at a net total value of 169.4 million riyals.

It explained that the agreement was signed with Oud Real Estate Private Fund (4), a closed private real estate investment fund managed by Oud Financial Company, to develop a mixed-use project comprising residential, commercial, and office uses in line with the master plan and approved regulatory requirements of Knowledge Economic City.

It added that the agreement includes leasing the office portion to be developed by the buyer, with a floor area of approximately 8,000 square meters, for 15 years according to the terms of the agreement, and Knowledge Economic City has the right to use or sublease the offices at its own discretion.

It mentioned that the book value of the land subject to the transaction in the company's records is 16.31 million riyals, expecting the transaction to generate a gross profit of 153.32 million riyals, before deducting any expenses, fees, or obligations related to completing the transaction.

It said that the two transactions come within the framework of the company's strategy aimed at maximizing the return on its land portfolio, amounting to about 6.8 million square meters, by developing it directly or in partnership with specialized investors and developers or through investment funds, contributing to accelerating the pace of project development and raising the efficiency of capital use.

It explained that the two agreements embody one of the models adopted by the company to develop its assets through specialized companies and investment houses, supporting the attraction of quality investments and enhancing urban development within Knowledge Economic City.

It expected that the two transactions would enhance the company's liquidity, support its financial position, and reinvest capital in implementing its current and future strategic projects, and accelerate the development of one of the strategic plots within Knowledge Economic City, supporting sustainable growth and enhancing added value for shareholders.

The company indicated that it will recognize the financial impact in the company's financial statements according to International Financial Reporting Standards (IFRS) upon satisfying the accounting recognition conditions and completing the ownership transfer procedures.

The company explained that it will use the proceeds from the two transactions to enhance the company's liquidity, support its financial position, and reinvest capital in implementing its current strategic projects to support sustainable growth and increase added value for shareholders, noting that there are no related parties.

Details of the two agreements signed for the sale of 3 land plots

Item

First Agreement

Second Agreement

Land

Two plots (C06-6) and (C06-3)

Land plot No. (C10-28)

Area

17.62 thousand m²

Net sale value

229.12 million riyals

169.64 million riyals

Buyer

Al-Bawaba International Investment Company

and Olo Real Estate Company

Oud Real Estate Private Fund (4) (managed by Oud Financial Company)

Purpose of development

Mixed-use project

Mixed-use project comprising residential, commercial, and office uses

Book value of land

21.61 million riyals

16.31 million riyals

Expected gross profit

207.52 million riyals

153.32 million riyals

Additional items

Establishment of a dedicated real estate investment fund for this purpose

Knowledge Economic City leases the office portion (about 8,000 m²) for 15 years with the right to sublease or use

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