Saudi-based Asas Makeen Real Estate Development and Investment Company has signed a framework agreement with two key entities - Middle East Financial Investment Company (MEFIC Capital), in its capacity as the fund manager, and Binaa Altharwat Financial Investment Company, in its capacity as the distributor, for the establishment of a private real estate investment fund that will develop prime land in Riyadh.
The initial target fund size is being planned at approximately SAR73.4 million ($20 million), said Asas Makeen in its filing to Saudi stock exchange Tadawul.
As per the deal, MEFIC Capital will establish the appropriate investment structure for the fund, prepare its documents, and complete the relevant regulatory requirements, while Binaa Altharawat will distribute the fund units.
Asas Makeen will contribute the land to the fund through an in-kind contribution representing 30% of the land's agreed value of SAR30.67 million, excluding real estate transaction tax and brokerage fees. The remaining portion of the land value will be paid in cash under the terms of the final sale and purchase agreement, it stated.
The fund is being established to develop two land plots owned by Asas Makeen in Riyadh's Al Hamra district, with a combined area of about 3,834 sq m.
Asas Makeen said the framework agreement provides for development fees equivalent to 10% of total development costs and brokerage fees of 2.5% of the land value, with final terms to be agreed under subsequent agreements.
The agreement will remain valid for 90 days or until the fund establishment process is completed, whichever comes first, unless extended by mutual consent, said the statement.
On the financial impact, Asas Makeen said it is expected to positively reflect on the company’s financial results during 2026 and 2027, following the completion of the fund establishment procedures and the execution of the relevant final agreements, and in line with the progress of the project works and the fulfillment of the relevant regulatory requirements.-TradeArabia News Service