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 229,117sqm.

The Multaqa Al Madinah 2 project will be developed on a 92,043sqm 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 3 residential zones, as well as commercial and office space with a net leasable area of about 31,108sqm. 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 US $184.6mn, while total equity required for the project is estimated at about US $222mn, it added.

The company expects to receive US $18mn in cash and fund units valued at about US $166.3mn 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.