Key Takeaways
- • First Avenue Consortium has signed a framework agreement for the East Hindawiyah Project in Makkah, a sustainable urban development valued at SAR 2 billion ($533 million), following a contract award from the Royal Commission for Makkah City and Holy Sites.
- • The consortium comprises First Avenue for Real Estate Development Company (45% stake), Dar Al Majed Real Estate Company (35%), and Rekaz Real Estate Company (20%), with Jadwa Investment Company serving as the private closed-ended real estate investment fund manager.
- • The consortium will receive a development fee equal to 15% of the project's actual costs, plus a performance incentive equivalent to 14% above the fund's target internal rate of return of 8%, contingent on completion of approved studies and engineering designs.
- • The East Hindawiyah District is planned as an integrated mixed-use urban destination featuring residential, commercial, office, retail, and hospitality components, designed to strengthen regional investment attractiveness and support economic diversification.
- • The framework agreement establishes the governance structure for fund establishment, land acquisition, and appointment of the consortium as exclusive developer and marketer, with final terms to be formalized in a future development agreement.
Summary
First Avenue Consortium has secured a landmark sustainable urban development project in Makkah through the execution of a framework agreement for the East Hindawiyah District. The project, valued at SAR 2 billion ($533 million), represents a significant infrastructure investment in the Holy City and follows a contract award from the Royal Commission for Makkah City and Holy Sites announced in early June 2026.
The consortium structure reflects a collaborative approach to project delivery and capital deployment. First Avenue for Real Estate Development Company leads the consortium with a 45% equity stake, while Dar Al Majed Real Estate Company holds 35% and Rekaz Real Estate Company holds 20%. Jadwa Investment Company, an established fund manager, has been appointed to manage a private closed-ended real estate investment fund, which will acquire project land and oversee capital deployment across the development lifecycle.
The financial structure provides incentive alignment between the developer and fund manager. The consortium is entitled to a development fee equivalent to 15% of the project's actual costs, with the final amount to be determined following completion of approved studies and engineering designs. Additionally, the consortium will receive a performance incentive equal to 14% of returns above the fund's target internal rate of return of 8%, contingent on project execution and returns achievement. This dual-fee structure ties developer compensation to both cost management and financial performance.
The framework agreement establishes the foundational governance and operational mechanics for project development. It regulates relationships among consortium parties and fund management, establishes principal terms and conditions for the East Hindawiyah development, and provides the mechanism for fund establishment, land acquisition, and appointment of the consortium as exclusive developer and marketer. The agreement operates within applicable Saudi Arabian regulatory requirements.
The East Hindawiyah District project is positioned as an integrated mixed-use urban destination, incorporating residential, commercial, office, retail, and hospitality components. The development is expected to strengthen investment attractiveness in the area, support economic diversification initiatives, and enhance the region's competitive positioning for both domestic and international capital.
The consortium structure reflects a collaborative approach to project delivery and capital deployment. First Avenue for Real Estate Development Company leads the consortium with a 45% equity stake, while Dar Al Majed Real Estate Company holds 35% and Rekaz Real Estate Company holds 20%. Jadwa Investment Company, an established fund manager, has been appointed to manage a private closed-ended real estate investment fund, which will acquire project land and oversee capital deployment across the development lifecycle.
The financial structure provides incentive alignment between the developer and fund manager. The consortium is entitled to a development fee equivalent to 15% of the project's actual costs, with the final amount to be determined following completion of approved studies and engineering designs. Additionally, the consortium will receive a performance incentive equal to 14% of returns above the fund's target internal rate of return of 8%, contingent on project execution and returns achievement. This dual-fee structure ties developer compensation to both cost management and financial performance.
The framework agreement establishes the foundational governance and operational mechanics for project development. It regulates relationships among consortium parties and fund management, establishes principal terms and conditions for the East Hindawiyah development, and provides the mechanism for fund establishment, land acquisition, and appointment of the consortium as exclusive developer and marketer. The agreement operates within applicable Saudi Arabian regulatory requirements.
The East Hindawiyah District project is positioned as an integrated mixed-use urban destination, incorporating residential, commercial, office, retail, and hospitality components. The development is expected to strengthen investment attractiveness in the area, support economic diversification initiatives, and enhance the region's competitive positioning for both domestic and international capital.
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