$400m Saudi fund to 'transform' three Riyadh projects
Sreco has signed a fund establishment agreement with Alinma Investment for the project
Al Akaria Saudi Real Estate Company (Sreco) has signed a fund establishment agreement with Alinma Investment Company (AIC) to establish a fund that will work on three sites in the kingdom’s capital Riyadh.
According to a statement by Sreco, the Alinma Alkaria RE Fund will ‘transform’ three sites into mixed-use developments, with a combined debt and equity structure valued at approximately $400m (SR1.5bn).
These projects include the Al Akaria Marriott Tower, offering hotel, extended stay and offices on Salah Al Din Al Ayyubi Road in the centre of Riyadh; the Riyadh Westin hotel located on Riyadh’s Northern Ring road; and Tilal Al Riyadh, which comprises residential and commercial options, in the North of Riyadh.
Under the agreement, AIC will manage the fund in accordance with the requirements of the Capital Market Authority.
It will be responsible for arranging part of the development fund of the three sites, with Sreco providing 8.2ha of land.
Sreco said it will also partially contribute to the fund.
Abdulrahman Almofadhi, chairman of the board of directors of Sreco, said the move was a “major milestone for Sreco and its new partnership-based investment strategy”.
He added: “AIC has been an active partner in the process of devising a detailed, sophisticated financial model that is sharia’a-compliant, and this new fund will be the first one to be established by Sreco to finance its projects, through which the company will contribute to the growing portfolio of large-scale, mixed-use developments in Saudi Arabia.”
The new fund mechanism includes a fund manager, a board of directors, a developer, contractors, an executive committee, legislative and regulatory bodies, an auditor, a custodian, and certified real estate evaluators.
The news comes less than a month after Sreco awarded Binyah a $292m (SAR1.1bn) infrastructure contract for its 700ha Al Widyan development in Riyadh’s Northern Corridor.