Knowledge Economic City signs agreement to develop Al Multaqa Residences project with Al-Rashed Real Estate

Logo of Knowledge Economic City Company

Knowledge Economic City Company announced the signing of a real estate development agreement with Al-Rashed Real Estate to develop the Al Multaqa Residences project, one of the strategic mixed-use projects in Knowledge Economic City in Madinah. The company said in a statement on Tadawul that the project implementation period stipulated in the agreement is 54 months starting from the date of signing the agreement and according to its terms, with the possibility of extension in cases stipulated in the agreement. It explained that under the agreement, Al-Rashed Real Estate has been appointed to take responsibility for the project’s design, engineering works, financing, execution, marketing, sale of units, delivery, and maintenance. The project will be developed in accordance with the off-plan real estate sales and leasing system and relevant regulations after obtaining all necessary licenses and approvals, while Knowledge Economic City Company retains the role of main developer and ownership of the project land throughout the agreement period. It stated that the agreement is part of its strategy to develop its assets through partnerships with specialized developers, contributing to accelerating the pace of development, maximizing returns on the land portfolio, enhancing added value for shareholders, and supporting the urban development targets of Knowledge Economic City. Al-Rashed Real Estate Group also adds value to the key projects being implemented in Knowledge Economic City due to its extensive and accumulated experience in the field of real estate development across all its components. This collaboration represents a step towards diversifying the development capabilities of Knowledge Economic City and benefiting from the expertise gained by Al-Rashed Group in implementing similar projects, especially in Riyadh.

It added that the Al Multaqa Residences project is located within Knowledge Economic City as part of the Al Multaqa City project on King Abdul Aziz Road in Madinah, overlooking Al Multaqa Mall from the western side, which is directly connected to the Hilton Hotel Tower and the Hilton Branded Residences tower, in addition to the Al Multaqa Hospitality project that includes JW Marriott Hotel, Marriott Hotel, and branded residential units (Branded Residences). The Al Multaqa Residences project includes residential units and branded residential units (Branded Residences), in addition to commercial areas, on a land area of 149.5 thousand square meters. The project is part of the integrated development system of Knowledge Economic City, serving the hospitality, tourism, shopping, entertainment, museum, and residential sectors, thereby enhancing the targets of Saudi Vision 2030, especially the tourism sector development targets, the Quality of Life Program, and the Guests of the Pilgrim Service Program.

It explained that the most prominent commercial and financial terms in the agreement, among other things, are as follows: - Adoption of the project land value based on SAR 9,000 per square meter with an estimated value of SAR 1.34 billion. - Distribution of any sales proceeds exceeding the reference development cost between Knowledge Economic City Company and Al-Rashed Real Estate Company according to the agreed percentages between the two parties. - Adjustment of financial dues for both parties if the final saleable area differs from the agreed minimum, according to the mechanism stipulated in the agreement. - The project development costs are expected to amount to approximately SAR 2.6 billion (excluding land value), and the project revenues are expected to reach about SAR 5 billion.

It added that its most prominent obligations, among other things, include: - Providing the project land. - Retaining ownership of the project land throughout the development period. - Completing the procedures for sorting, vacating, and transferring ownership to buyers after fulfilling regulatory requirements. It pointed out that the book value of the project land is approximately SAR 94 million. Al-Rashed Real Estate Company, among other things, undertakes to prepare and approve engineering designs, obtain the necessary licenses for development works, fully finance the project, appoint consultants, contractors, and suppliers, execute construction works, manage marketing and sales operations, open and manage the escrow account for the project, deliver units to buyers in accordance with applicable regulations, and fulfill post-delivery obligations according to relevant regulations. It indicated that the financial impact will be the returns from the project operations and will be recognized in the company's financial statements according to International Financial Reporting Standards (IFRS) and based on project progress and fulfillment of accounting recognition conditions. It added that this agreement represents a strategic partnership with one of the leading real estate development companies in the Kingdom, and is expected to contribute to accelerating the development pace of the Al Multaqa area, maximizing the investment value of the company's land portfolio, enhancing liquidity, recycling capital to finance its strategic projects, diversifying its development capabilities, and enhancing sustainable value for shareholders, in addition to supporting the targets of Saudi Vision 2030.

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