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Knowledge Economic City (KEC) signed, on April 21, 2021, an agreement with Riyad Capital to invest SAR 97 million in Madinah Gate Fund from the cash available to the company, the firm said in a statement to Tadawul.
Riyad Capital is the fund manager to Madinah Gate Fund.
In addition to its in-kind and cash contribution to the fund, KEC will establish a bus station, public transport and complementary services project adjacent to the fund’s project.
The bus station will serve the fund’s project and future projects in the vicinity of the Haramain High Speed Train Station, which will be developed in conjunction with the real estate fund project that includes a shopping mall, hotel and recreational area -- being developed by the Madinah Gate Fund.
Implementation work is expected to begin in August 2021, the shopping mall is set to be delivered by the end of 2023 and the hotel will be completed in May 2024.
In a separate statement, the company said that it signed an agreement with Riyad Capital to assign the entire shares of its subsidiary that owns Bawabat Al Madinah Real Estate Development Co. Ltd. in favor of Madinah Gate Fund (the first stage) for SAR 68 million.
The sale value will be recorded as an in-kind contribution to the fund in favor of its 80%-owned subsidiary, Al Gharraa International For Real Estate Development Co. LLC, which owns the total shares of Bawabat Al Madinah Real Estate.
The shares transfer will result in capital gains, the value and impact of which will be determined on completion of the transfer of shares.
In a separate statement, KEC said it signed term agreement with Riyad Capital to manage the development of Madinah Gate project (the first stage), in exchange for fees represented by a certain percentage of the costs of implementing the project with an additional incentive if the project is completed within a specified period agreed between the two parties.
The financial impact will be reflected when fees is received on intervals and in accordance with the progress of the project.
The company indicated that there is no related party in any of the agreements mentioned.
In March 2019, KEC announced the conclusion of the feasibility studies of Madinah Gate project and started work on the preliminary designs of the project expecting first phase to cost SAR 385 million, according to data compiled by Argaam.
On July 3, 2019, the company signed an initial agreement with Riyad Capital regarding the management of the investment real estate fund to be established to undertake the development of Madinah Gate project.
The project aims to develop the land adjacent to the Haramain High Speed Train Station in Madinah and the area overlooking Prince Nayef Road as the first Transit Oriented Development project in the Kingdom.
The project will include three main components, a four-star hotel and hotel apartments, shops, restaurants, an entertainment area, and a bus station connected directly to the train station. The development includes a commercial and entertainment center with a leasable area of 23,000 square meters, comprising 78 shops, 39 restaurants and cafes, two entertainment centers, a cinema with 800 seats capacity, and 800 parking spaces.
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