Saudi Arabia’s Knowledge Economic City Company (KEC) has announced that it had signed an agreement with Dar Almajed Real Estate Company (Almajdiah) and Capital Hill for the development of a new residential project in Madinah at an estimated cost of SAR2.8 billion ($738 million).

Spanning a 97,000-sq-m area within Knowledge Economic City, the project will boast around 2,700 residential apartments as well as 8,000 sq m of net leasable commercial space and 3,500 parking spaces.

The premium project is expected to generate more than SAR4 billion in revenue, said KEC in its filing to Saudi bourse Tadawul.

Under the proposed structure, the project will be owned and financed through a closed-ended real estate investment fund, with KEC holding 80 per cent of the fund units and Almajdiah 20 per cent. 

As per the deal, KEC will contribute to the project land, initially valued at about SAR875.4 million, while Almajdiah will contribute cash and serve as development manager. Capital Hill will establish and manage the fund, it stated.

KEC will receive SAR89 million in cash from Almajdiah and fund units valued at SAR786.4 million for the remaining value of the land. Almajdiah’s total contribution is expected to be about SAR200.7 million, it added.

The development will form part of a wider interconnected district within Knowledge Economic City, alongside projects including Multaqa Al Madinah 1 and 2, Multaqa Residences and Multaqa Hospitality.