Key Takeaways
- • KEC and Kaden Investment Company signed an agreement to develop Multaqa Al-Madinah 2, a mixed-use project in Medina with 230,000 sq m gross floor area on a 92,000 sq m plot, structured through a closed-ended real estate investment fund regulated by Saudi Arabia's Capital Market Authority.
- • Land valuation of SR692.3m ($184.6m) with total project equity estimated at SR833m; KEC will contribute land as in-kind investment (75% fund ownership) while Kaden contributes cash (25% ownership) and serves as development manager.
- • Project composition includes 1,527 residential units across three zones, 31,108 sq m of net leasable commercial and office space, plus parking, recreational facilities, and supporting infrastructure.
- • KEC expects to receive SR67.7m in cash and SR624.6m in fund units upon final agreement execution, providing immediate liquidity and equity stake in the completed asset.
- • Development timeline targets Q1 2025 launch with Q1 2029 completion, positioning the project within Medina's broader masterplan expansion north of the first Multaqa Al-Madinah phase.
Summary
Medina's Knowledge Economic City (KEC) has formalized a real estate development partnership with Riyadh-based Kaden Investment Company to construct Multaqa Al-Madinah 2, a substantial mixed-use project expanding KEC's residential and commercial footprint in western Saudi Arabia. The development agreement, filed with the Saudi Exchange (Tadawul), represents a strategically structured capital partnership that leverages KEC's land assets while mobilizing private capital for execution.
The project encompasses a 92,000 sq m development plot positioned directly north of the initial Multaqa Al-Madinah phase, with a total gross floor area of approximately 230,000 sq m. The residential component will deliver 1,527 units distributed across three distinct zones, complemented by 31,108 sq m of net leasable commercial and office space. Supporting amenities include parking facilities, recreational spaces, landscaping, and essential infrastructure.
The financing structure employs a closed-ended real estate investment fund framework regulated by Saudi Arabia's Capital Market Authority. Under this arrangement, KEC contributes the underlying land as an in-kind contribution and retains a 75% stake in fund units, while Kaden Investment Company provides cash capital, holds 25% of fund units, and assumes the development manager role. The land has been valued at SR692.3m ($184.6m), with total project equity requirements estimated at SR833m. Upon final agreement execution, KEC anticipates receiving SR67.7m in cash proceeds and SR624.6m in fund units, combining immediate liquidity with long-term equity participation in the completed asset.
Development is projected to launch in Q1 2025 with completion expected by Q1 2029, integrating the project into KEC's broader masterplan expansion and contributing to Medina's positioning as a mixed-use knowledge and residential hub. The fund structure provides KEC downside protection through its majority ownership while enabling experienced development management by a specialized partner, balancing risk distribution across both parties.
The project encompasses a 92,000 sq m development plot positioned directly north of the initial Multaqa Al-Madinah phase, with a total gross floor area of approximately 230,000 sq m. The residential component will deliver 1,527 units distributed across three distinct zones, complemented by 31,108 sq m of net leasable commercial and office space. Supporting amenities include parking facilities, recreational spaces, landscaping, and essential infrastructure.
The financing structure employs a closed-ended real estate investment fund framework regulated by Saudi Arabia's Capital Market Authority. Under this arrangement, KEC contributes the underlying land as an in-kind contribution and retains a 75% stake in fund units, while Kaden Investment Company provides cash capital, holds 25% of fund units, and assumes the development manager role. The land has been valued at SR692.3m ($184.6m), with total project equity requirements estimated at SR833m. Upon final agreement execution, KEC anticipates receiving SR67.7m in cash proceeds and SR624.6m in fund units, combining immediate liquidity with long-term equity participation in the completed asset.
Development is projected to launch in Q1 2025 with completion expected by Q1 2029, integrating the project into KEC's broader masterplan expansion and contributing to Medina's positioning as a mixed-use knowledge and residential hub. The fund structure provides KEC downside protection through its majority ownership while enabling experienced development management by a specialized partner, balancing risk distribution across both parties.
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