Saudi-headquartered Asas Makeen Real Estate Development and Investment Company has signed a real estate development agreement with BLOM Real Estate Investment Fund XII to develop a new residential project in Riyadh. The fund is managed by BLOM Invest Saudi Arabia.

The estimated cost of executing the project, including development management fees is said to be US $35.2mn, excluding value-added tax.

The project will be developed on a 16,620sqm area and feature about 290 residential units, said Asas Makeen in its filing to the Saudi stock exchange Tadawul.

As per the terms of the deal, Asas Makeen will serve as the project development manager for the scheme in the Al Narjis district, overseeing the project’s management, development and execution. The contract will be completed in 18 months.

Asas Makeen said the project forms part of a strategy to expand its real estate development business through partnerships with landowners and investment funds while diversifying its revenue streams and strengthening its presence in the Saudi residential market. As per the deal, the company will receive development management fees of $2.97mn excluding VAT.

The company confirmed it will also invest $3.98mn in the fund through the subscription of 14,958 investment units, in line with the agreement and related definitive documents. The investment fund will have a target size of about $80.8mn, it stated.

Asas Makeen said it expects the agreement to have a positive impact on its financial results over the project period, subject to construction progress and the fulfilment of contractual conditions.