SAR2.5bn mixed-use development planned in Madinah

Knowledge Economic City Company and Kaden Investment Company have agreed to pursue a SAR2.5bn ($667m) mixed-use development in Madinah, opening a new pipeline of residential, commercial and infrastructure work in one of Saudi Arabia’s fastest-growing urban markets.

The companies signed a memorandum of understanding on 7 September covering Multaqa Al Madinah 2, an extension of the existing Multaqa Al Madinah destination. The proposed scheme will occupy about 92,043 square metres immediately north of the first phase, overlooking King Abdulaziz Road.

Initial plans envisage approximately 1,527 residential units across three residential zones. The scheme will also contain about 31,108 square metres of leasable commercial and office space, together with parking, clubs, recreational facilities, landscaping, supporting infrastructure and development of the neighbouring central park.
The project has an estimated gross floor area of about 229,117 square metres. Residential units are intended to be sold, including through off-plan sales during construction, while the commercial and office components would initially be retained for leasing and operation.

The partners plan to establish a closed-ended real-estate investment fund to own, finance and develop the scheme. KEC would contribute the land and hold 75% of the fund, while Kaden would provide a cash contribution and hold 25%. Initial equity requirements are estimated at SAR832.7m.

The remaining financing is expected to combine bank debt with proceeds from off-plan residential sales. Capital Hill is proposed as fund manager, while Kaden would serve as development manager with responsibility for development, leasing, property management and residential sales.

The MOU establishes a 90-day exclusive negotiation period for due diligence, studies and preparation of definitive agreements. This makes the project particularly relevant for banks, design consultants, project managers, main contractors, MEP companies and suppliers seeking to position themselves before construction procurement begins.

Sources: Saudi Gulf Projects, Knowledge Economic City,