Asas Makeen inks residential development contract in Riyadh

Asas Makeen estimates the total project cost, including development management fees, at SAR 131.88 million, excluding VAT.

Asas Makeen Real Estate Development and Investment Co. signed a real estate development agreement with BLOM Real Estate Investment Fund XII, managed by BLOMINVEST Saudi Arabia, to develop and execute a premium residential project in Al Narjis District, Riyadh.

In a statement to Tadawul, the company said the fund is targeting a size of approximately SAR 303 million.

The project will be developed on a 16,620-square-meter plot and will house around 290 residential units, which reflects its scale and strategic importance within the company's portfolio of residential developments in Riyadh.

The estimated total project cost, including development management fees, is SAR 131.88 million, excluding VAT.

Under the agreement, Asas Makeen will receive SAR 11.22 million in development management fees, excluding VAT.

The agreement also provides for the company's participation in the fund through a subscription to 14,958 investment units valued at SAR 14.96 million.

The investment aligns with Asas Makeen's strategy to invest in real estate funds and forge partnerships with specialized investment entities, subject to the execution of the relevant final agreements.

Asas Makeen expects the agreement to positively impact its financial results as the project progresses and the contractual payment terms are met.

The 18-month execution period will commence upon the fulfillment of the conditions precedent and an advance payment.

The project is part of Asas Makeen’s strategy to expand its real estate development and project management business, strengthen partnerships with landowners and investment funds, and maximize land value through high-quality developments.

The move also aims to diversify the company's revenue streams, increase market share, and support the long-term growth and sustainability of its business, the statement said.