RIYADH: Tadawul-listed Dar Al Majed Real Estate Co. has signed a SR185 million ($49.3 million) development agreement with Jadwa Al Maqar Real Estate Fund to develop 296 residential units in Madinah, expanding its pipeline in Saudi Arabia’s two holy cities.
The agreement covers development works in the first area of the Mashraf Al Majdiah project, as well as its central public realm, in Madinah’s Al-Hadra district, according to a Saudi Exchange filing.
The project will comprise 66 villas and 230 apartments, with Al Majdiah acting as developer and providing design, planning, development and supervision services.
The deal comes as the Kingdom implements its new regime for non-Saudi real estate ownership, which took effect on Jan. 22. The framework allows eligible non-Saudis to acquire property and other real rights within designated geographic zones, subject to specific regulatory controls. In June, Saudi authorities approved the geographic zones, with Mashraf among the designated areas in Madinah.
In the bourse filing, Al Majdiah said the agreement “represents a continuation of the company’s development activities within the project and further strengthens its presence in Madinah.”
Al Majdiah’s responsibilities also include coordinating contractors and consultants, securing required approvals and licenses, and marketing and selling the residential units.
The development cost is capped at SR185 million, comprising SR158.12 million in direct costs and SR26.88 million in indirect costs. Al Majdiah will receive development fees based on direct costs, along with sales and marketing fees and a performance incentive subject to agreed conditions.
Construction is expected to take 24 months from the Sept. 10 signing date, with the agreement remaining in effect until final handover and issuance of the completion certificate. Revenue will be recognized over the execution period based on the percentage of completion.
The Madinah agreement follows a SR395.8 million deal signed by Al Majdiah in August with Alistithmar Real Estate Fund 9 to act as master developer for two residential towers in Zone 1 of the Masar destination in Makkah. The project is being developed on a plot of about 6,614 sq. meters, with a 30-month execution period beginning with the issuance of the building permit.
Al Majdiah is also part of a consortium developing the Eastern Hindawiyah area in Makkah. In June, Al Majdiah, First Avenue for Real Estate Development Co. and Rikaz Real Estate Co. signed a framework agreement with the Royal Commission for Makkah City and Holy Sites, with Jadwa Investment serving as fund manager.
The Eastern Hindawiyah project covers about 235,000 sq. meters and has estimated costs of approximately SR2 billion, including land acquisition and infrastructure but excluding potential superstructure works. Under the framework agreement, the consortium will receive a development fee equivalent to 15 percent of actual project costs, with the final amount to be determined under a subsequent development agreement.
As of June 30, Al Majdiah had 41 projects in its overall portfolio, including 31 in its active development pipeline, spanning Riyadh, Jeddah, Madinah and Al Khobar, while its participation in Eastern Hindawiyah marked an expansion into Makkah.
