Deal

KEC and Kaden sign for SAR 2.5 billion Multaqa Al Madinah 2

By Staff Writer  |  08-09-2026

Knowledge Economic City Company has signed a memorandum of understanding with Kaden Investment Company to develop Multaqa Al Madinah 2, a mixed-use extension to its Multaqa Al Madinah destination in Madinah, at a total project cost initially estimated at approximately SAR 2.5 billion. The disclosure to the Saudi Exchange on 8 September 2026 sets out a closed-ended real estate fund structure, with the listed company contributing the land and holding 75 percent of the fund units.

What was signed

The memorandum was signed on 7 September 2026 and disclosed the following morning. It establishes the general framework for cooperation between the two companies to develop the project, which sits immediately north of the first phase of Multaqa Al Madinah, overlooking King Abdulaziz Road and adjacent to the Boulevard at Knowledge Economic City. The first phase comprises the mall, the Hilton hotel tower and the Hilton-branded residences tower, and the company describes the new project as an integrated extension comprising residential, commercial and office components together with supporting facilities and services.

The land area is approximately 92,043 square metres and the estimated gross floor area is approximately 229,117 square metres. Based on the initial concept, the project is expected to comprise approximately 1,527 residential units across three residential zones, together with commercial and office components with a net leasable area of approximately 31,108 square metres, parking, clubs, recreational and service facilities, and landscaping works for the central park adjacent to the project.

The residential component is intended to be developed for sale, including off-plan sales during construction and the sale of any remaining units after completion and handover. The commercial and office components are intended to be developed, leased and operated until they reach stabilised operations and occupancy, and then held until exit through a sale.

The fund structure and the figures

The parties intend to establish a closed-ended real estate investment fund, subject to the laws and regulations of the Capital Market Authority, to own, finance and develop the project. Knowledge Economic City Company will hold 75 percent of the fund units in consideration for its in-kind contribution of the project land and Kaden Investment Company will hold 25 percent in consideration for a cash contribution. Capital Hill is to be appointed as fund manager. Kaden will act as development manager, covering development activities, leasing, property management and residential unit sales under definitive agreements still to be entered into.

The disclosure values the land to be contributed at approximately SAR 692.3 million, being SAR 536.9 million for the residential part at SAR 9,000 per square metre and SAR 155.5 million for the offices part at SAR 4,800 per square metre. Total equity required for the project is initially estimated at approximately SAR 832.7 million, of which approximately SAR 624.6 million represents the company's 75 percent interest and approximately SAR 208.2 million represents Kaden's 25 percent. The total project cost is initially estimated at approximately SAR 2.5 billion, to be financed through a combination of equity, bank financing and proceeds from off-plan sales, subject to the final financing structure and the relevant approvals.

On financial impact, the company says that on execution of the definitive agreements it expects to receive a cash amount of SAR 67.7 million in addition to fund units equivalent to SAR 624.6 million, against an approximate land cost of SAR 64.2 million. A later paragraph of the same disclosure gives the cash figure as approximately SAR 67.8 million. Both figures appear on the record and the difference is not explained. The impact will be recognised in the financial statements under International Financial Reporting Standards once the accounting recognition criteria are met and the title transfer procedures are complete.

What happens next

Exclusivity. The memorandum provides for an exclusivity period of 90 days from signing, during which the parties will conduct negotiations, studies and due diligence and work towards finalising the definitive agreements. The company states that the proposed structure remains subject to those definitive agreements and to the relevant regulatory approvals, and that there are no related parties to the transaction.

What the record does not say. The disclosure gives no construction start date, no completion date, no contractor and no phasing. It does not say whether the SAR 2.5 billion total project cost includes the value attributed to the land, and it gives no figure for construction cost as distinct from total cost. The company describes the memorandum as consistent with its strategy of developing its land portfolio through partnerships with specialised investors and developers, and this desk reports that as the company's own characterisation of the agreement.