Knowledge Economic City plans $400m hospitality project fund with Albilad

Saudi Arabia's Knowledge Economic City has announced that it had signed a non-binding term sheet with Albilad Capital for the establishment of a closed-ended private real estate investment fund to finance the first phase of its Multaqa Hospitality project in Madinah.

The project has an estimated development value of around SAR1.5 billion ($400 million), including land value. It will comprise a 288-key JW Marriott hotel, a 327-key Marriott hotel and about 295 branded residential units, said KEC in its filing to Saudi bourse Tadawul.

Strategically located on King Abdulaziz Road in Madinah, it will be connected to Multaqa Mall, the Hilton Hotel Tower and the Hilton Branded Residences Tower via a pedestrian skybridge.

Under this deal, Albilad Capital will act as the fund manager, subject to regulatory approvals and the execution of definitive agreements.

The proposed fund will help finance the development of Multaqa Hospitality Cluster 1, part of the company's broader Multaqa Almadinah masterplan, through a combination of equity contributions and bank financing, it added.

KEC said the term sheet sets out the preliminary framework for establishing and launching the fund and will remain effective until the fund is established and definitive agreements are signed, or until certain termination events occur, including the failure to meet regulatory, financing, technical or approval requirements, or the expiry of a six-month exclusivity period without extension or the issuance of a construction permit.

The investment fund, once all regulatory and contractual requirements are met, is expected to support the project's development and advance its strategy of expanding hospitality and other mixed-use assets, it added.-TradeArabia News Service