KEC pens LOI for SAR 7.5B Knowledge Gardens project

Logo of Knowledge Economic City (KEC)

Knowledge Economic City (KEC), together with its subsidiary Algharraa International Real Estate Development Co. Ltd., signed a letter of intent (LOI) with BSF Capital.

The move aims to establish the general framework for launching and managing a closed-end private real estate investment fund, regulated by the Capital Market Authority (CMA), to develop the Knowledge Gardens project within Knowledge Economic City in Madinah.

The project will be undertaken in partnership with Fourmen Investment Co., with the possibility of additional investors joining the fund, KEC said in a statement to Tadawul.

The parties to the LOI include KEC and Algharraa International as co-sponsors and co-developers, Fourmen as the lead sponsor and developer and BSF Capital as the proposed fund manager.

The proposed fund structure is based on an in-kind land contribution valued at approximately SAR 1.66 billion, in addition to direct cash contributions, bank financing, and investments from other investors.

KEC said that establishing the fund and implementing the project remain subject to fulfilling all regulatory and contractual requirements, including obtaining the necessary approvals, signing the final agreements, and completing financing arrangements.

The company also expects the fund to secure a five-year bank financing facility, comprising three years for project development and two years for repayment from sales proceeds. The final financing terms will be determined upon signing the definitive agreements and obtaining all required regulatory approvals.