Al Majdiah signs SAR 185M deal to develop 296 residential units in Madinah

The financial impact of the deal will be realized throughout the project execution period

Dar Al Majed Real Estate Co. (Al Majdiah) signed on Sept. 10 a real estate development agreement with Jadwa Al Maqar Real Estate Fund, represented by Masaken Noura Real Estate Co.

The agreement covers development works with a maximum cost of SAR 185 million, including SAR 158.12 million in direct costs and SAR 26.88 million in indirect costs.

Al Majdiah will develop 296 residential units, including 66 villas and 230 apartments, the company said in a statement to Tadawul.

It will also develop the general site of the central area within Mashraf Al Majdiah project in Al-Hadra district, Madinah. The previously developed show area is excluded from the agreement’s scope, as are the remaining areas of the project.

In its capacity as the developer, Al Majdiah will provide development services and oversee works related to the first area and the general site of the project’s central area.

The services include design, planning, development, coordination, and supervision of contractors and consultants, completion of the necessary requirements and permits, as well as activities related to the marketing and sale of real estate units, in accordance with the scope of work and terms specified in the agreement.

The company said it will receive a development fee based on direct costs, along with sales and marketing fees, in addition to a performance incentive upon meeting the applicable eligibility conditions, in accordance with the agreed terms.

The completion period is 24 calendar months from the date of the agreement, and the agreement will remain in effect until final handover and issuance of the completion certificate.

The company noted that the financial impact of the agreement will reflect in its financial statements throughout the project execution period, with revenue recognized based on the percentage of completion starting from the agreement’s execution period.

Al Majdiah board member and Acting CEO Abdulsalam Al Majed is also on the board of Jadwa Al Maqar Real Estate Fund and, therefore, has an indirect interest in the agreement, the statement added.

Meanwhile, Al Majdiah noted that the agreement extends work on the project and strengthens its presence in Madinah.