Riyadh – Mubasher: Knowledge Economic City has signed a letter of intent (LOI) with its subsidiary, Al Gharaa International Real Estate Development Limited, BSF Capital, and Foreman Investment to establish a private closed-ended real estate investment fund.
The fund aims to develop the Knowledge Gardens project in Madinah with an estimated total cost of SAR 7.50 billion, according to a bourse filing.
Under the preliminary agreement, Knowledge Economic City and its subsidiary expect to receive a cash payment of approximately SAR 800 million. This represents a portion of the land value, which is appraised at SAR 1.66 billion.
The remaining value will be retained as an in-kind contribution, granting the company and its subsidiary a 39.90% equity stake in the fund. Foreman Investment is expected to hold 46.20%, while other investors will hold 13.90%.
The project, covering a net land area of 332,054 square meters, is projected to generate total revenues of SAR 10.20 billion. The development plan includes 4,198 residential units, 183 serviced apartments, and a 450-room hotel. The fund's term is set for four years, including three years for development and one year for marketing.
The letter of intent remains valid for 120 days to finalize definitive agreements.
Knowledge Economic City recently rolled out a development agreement amounting to SAR 1.35 billion with Al Rashid Real Estate to develop the Al Multaqa Residence project in Madinah.
