Saudi Companies Form Real Estate Fund for Medina Project

A trio of Saudi companies has joined forces to set up a private real estate fund for the construction of a mixed-use project in Medina, targeting non-Saudi buyers. Dar Al Majed Real Estate Company (Al Majdiah) has signed a memorandum of understanding with Knowledge Economic City Company (KEC) to develop the SAR2.8 billion ($750 million) project in Knowledge Economic City, the two companies said in separate statements to the Saudi stock exchange. KEC will contribute land valued at about SAR875 million, while Al Majdiah will put up SAR201 million. The fund, owned 80 percent by KEC and 20 percent by Al Majdiah, will be managed by the third company, Capital Hill. The development will include 2,700 residential apartments, a commercial component with a net leasable area of 8,000 square metres and more than 3,500 parking spaces. The project will move forward after due diligence is completed and definitive agreements are executed, the statements said. In July, KEC set up a private real estate fund to develop two hotels and a branded residential scheme in Medina. KEC shares closed 2.2 percent lower at SAR18.47 on Monday, up around 60 percent so far this year. Saudi Arabia in June began accepting applications from non-Saudis to buy property, after the cabinet designated geographic areas for ownership.