Saudi Arabia's Knowledge Economic City (KEC) has announced that it had signed an agreement with Kaden Investment Company to develop a mixed-use project in Madinah with an estimated gross floor area of about 229,117 sq m.

The Multaqa Al Madinah 2 project will be developed on a 92,043-sq-m plot immediately north of the first phase of the Multaqa Al Madinah development, KEC said in a statement to the Saudi Exchange.

The project is expected to include about 1,527 residential units across three residential zones, as well as commercial and office space with a net leasable area of about 31,108 square metres. It will also include parking, recreational and service facilities and landscaping.

KEC and Kaden plan to develop the project through a closed-ended real estate investment fund regulated by Saudi Arabia's Capital Market Authority.

Under the proposed structure, KEC will contribute the project land as an in-kind contribution and hold 75% of the fund units, while Kaden will provide a cash contribution and hold the remaining 25%. Kaden will also act as development manager, said the company in its bourse filing.

The project land has been initially valued at about SAR692.3 million ($184.6 million), while total equity required for the project is estimated at about SAR832.7 million, it added.

The company expects to receive SAR67.7 million in cash and fund units valued at about SAR624.6 million once definitive agreements are signed, subject to regulatory approvals and completion of the land transfer.

The residential units are planned for sale, including through off-plan sales during construction. The commercial and office components will be developed for lease and operation before a planned sale after reaching stable occupancy and operations, it added.-TradeArabia News Service