New $746 million development to bring 2,700 homes to Medina

A new mixed-use development worth $746 million is set to take shape in Medina, Saudi Arabia, as three Saudi developers join forces on a project targeting non-Saudi Muslim buyers.

Knowledge Economic City Company (KEC), Dar Al Majdiah Real Estate Co. (Al Majdiah), and Capital Hill Company have signed a memorandum of understanding to establish a closed-ended real estate investment fund for the development of the project.

The development will span 97,000 square meters and include around 2,700 residential apartments, approximately 8,000 square meters of net leasable commercial space and more than 3,500 parking spaces, according to separate statements to the Saudi Exchange.

The project has an estimated total cost of $746.25 million, while KEC expects revenue to exceed $1.07 billion.

Under the proposed structure, KEC will contribute the project land, while Al Majdiah will contribute cash and act as the investor and development manager. Meanwhile, Capital Hill will establish and manage the proposed fund.

KEC will hold approximately 80% of the fund, while Al Majdiah will hold the remaining 20%.

The project comes as Saudi Arabia opens its real estate market to foreign buyers. In June, the Kingdom began accepting applications from non-Saudis to purchase property after the cabinet designated geographic areas where foreign ownership would be permitted.

KEC has also been expanding its development pipeline in Medina. In July, the company established a private real estate fund to develop two hotels and a branded residential scheme in the city.