KEC signs development deal for Multaqa Residences

Logo of Knowledge Economic City (KEC)

Knowledge Economic City (KEC) signed a real estate development agreement with Al Rashid Properties to develop the Multaqa Residences project, one of its strategic mixed-use developments within Knowledge Economic City in Madinah, the company said in a Tadawul statement.

The agreement has a term of 54 months from the signing date, with the option to extend under its terms.

Under the agreement, Al Rashid Properties will be responsible for the project's design, engineering, financing, construction, marketing, sales, delivery, and maintenance.

The project will be developed under Saudi Arabia's off-plan real estate sales and leasing regulations after obtaining the required approvals. KEC will retain its role as the master developer and ownership of the project land throughout the agreement.

The company said the partnership supports its strategy of developing its assets through specialized developers to accelerate project execution, maximize returns on its land portfolio, enhance shareholder value, and advance urban development within Knowledge Economic City.

KEC added that Al Rashid Properties will contribute its extensive expertise across all aspects of real estate development, particularly through its experience in delivering similar projects in Riyadh.

Multaqa Residences is part of the Multaqa Al Madinah development on King Abdulaziz Road in Madinah.

The project overlooks Multaqa Mall and is directly linked to the Hilton Hotel tower, Hilton Branded Residences tower, the Multaqa Hospitality development, the JW Marriott Hotel, the Marriott Hotel and branded residential units.

The development will include residential units, branded residences and commercial space across a 149,500-square-meter site. It forms part of KEC's integrated master plan, serving the hospitality, tourism, retail, entertainment, museum and residential sectors in line with Saudi Vision 2030, particularly the Tourism, Quality of Life and Pilgrim Experience programs.

KEC said the project land is valued at SAR 9,000 per square meter, with an estimated total value of SAR 1.34 billion.

Any sales proceeds exceeding the reference development cost will be shared between KEC and Al Rashid Properties based on agreed percentages. The parties' financial entitlements will be adjusted if the final saleable area differs from the agreed minimum, in accordance with the agreement.

The project's development cost is estimated at approximately SAR 2.6 billion, excluding land value, with total revenue expected to reach around SAR 5 billion.

KEC's obligations include providing the project land, retaining ownership throughout the development period, and completing subdivision, title transfer, and ownership registration procedures after all regulatory requirements are met.

The company said the book value of the project land is approximately SAR 94 million.

Al Rashid Properties will prepare and approve the engineering designs, secure the required permits, fully finance the project, and appoint consultants, contractors, and suppliers.

It will also execute the construction works, manage the project's marketing and sales activities, operate the escrow account, deliver the units to buyers, and fulfill all post-handover obligations.

KEC said the project's financial impact will be recognized in its financial statements in accordance with International Financial Reporting Standards (IFRS), based on construction progress and the fulfillment of accounting recognition criteria.

The company added that the agreement represents a strategic partnership with one of the Kingdom's leading real estate developers.

It is expected to accelerate the development of the Multaqa area, maximize the investment value of the company's land portfolio, enhance liquidity, and recycle capital to finance its strategic projects.

The partnership is also expected to diversify the company's development capabilities, enhance sustainable value for shareholders, and support the objectives of Saudi Vision 2030.