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Saudi-based Asas Makeen Real Estate Development and Investment Company has signed a real estate development agreement with BLOM Real Estate Investment Fund XII, managed by BLOM Invest Saudi Arabia, to develop a residential project in Riyadh's Al Narjis district.
Asas Makeen's Role in the Project
Under the agreement, Asas Makeen will serve as the project development manager, overseeing the scheme's management, development, and execution from start to finish. The project will be built on a 16,620.59-square-metre plot and will feature approximately 290 residential units, according to the company's filing to the Saudi stock exchange Tadawul. The entire contract is expected to be completed within 18 months.
Project Cost and Financial Structure
The estimated cost of executing the project, including development management fees, stands at SAR132 million (roughly $35.2 million), excluding value-added tax. As part of the arrangement, Asas Makeen will receive development management fees of SAR11.2 million, also excluding VAT.
- Project location: Al Narjis district, Riyadh
- Plot size: 16,620.59 sq m
- Residential units: approximately 290
- Completion timeline: 18 months
- Total project cost: SAR132 million (~$35.2 million), excluding VAT
- Development management fees: SAR11.2 million, excluding VAT
Also Read: Saudi Issues New Rules for Foreign Property Investors
Fund Investment and Strategic Rationale
Beyond its management role, Asas Makeen will also invest SAR15 million in the fund through the subscription of 14,958 investment units, in line with the agreement and related definitive documents. The investment fund itself carries a target size of about SAR303 million ($80.8 million).
Asas Makeen said the project forms part of a broader strategy to expand its real estate development business through partnerships with landowners and investment funds, while diversifying its revenue streams and strengthening its presence in the Saudi residential market. This model combining a management role with direct capital investment in the underlying fund allows the company to earn fee-based income while also holding a financial stake in the project's long-term performance.
What This Means Going Forward
Asas Makeen said it expects the agreement to have a positive impact on its financial results over the project period, though this remains subject to construction progress and the fulfilment of contractual conditions. For Riyadh's residential market, the deal adds another mid-sized development to a district that has been steadily attracting new housing projects as the city's population and investment activity continue to grow.
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