Riyadh – Mubasher: Ladun Investment Company has officially signed a framework agreement with the Royal Commission for Makkah City and Holy Sites to develop the Al Khalidiyah informal area in Makkah.
The project was awarded to a consortium comprising Ladun in addition to Al Ayuni Investment and Contracting Company.
The contract involves the establishment of a private closed-ended real estate investment fund with a minimum capital of SAR 4 billion, according to a bourse disclosure. This strategic initiative is part of the broader Developed Neighborhoods Program aimed at urban regeneration and infrastructure modernization within the holy city.
The agreement was signed on 24 June 2026 and follows the initial project award announced on 31 May 2026. Under the terms of the framework, the consortium will operate through a 50-50 partnership, with Ladun and Al Ayuni Investment sharing equally in development tasks, marketing, sales returns, and both in-kind and cash contributions.
A central component of the project is the creation of the fund in strict compliance with the Real Estate Investment Funds Regulations issued by the Capital Market Authority (CMA) and other relevant statutory frameworks.
The Royal Commission for Makkah City and Holy Sites will facilitate the transfer of the project land ownership to the fund. Once the transfer is complete, the consortium will undertake the comprehensive planning and development of the site’s infrastructure.
Following the infrastructure phase, the land will be subdivided into individual plots. The consortium, acting as the exclusive marketer for the project, will manage the sale of these plots on behalf of the fund before eventually exiting the investment.
The scope of work is extensive, requiring the design, implementation, and delivery of infrastructure that meets rigorous planning and engineering standards. These standards are designed to balance modern developmental requirements with the preservation of the city’s existing urban and social fabric.
To ensure the project meets all national benchmarks, the consortium is required to coordinate with a wide array of stakeholders and service providers. These include the Municipality of the Holy Capital, the National Water Company, the Saudi Electricity Company, various telecommunications firms, the General Real Estate Authority, and the Off-Plan Sales and Rent Program (Wafi).
The duration of the investment fund is set for five years, with the possibility of two one-year extensions, totaling a potential seven-year term from the fund's inception date.
This timeline is subject to the specific terms and conditions outlined in the fund’s governing documents.
Regarding the financial implications, Ladun Investment Company anticipates that the project will begin to reflect positively on its profitability starting from the fiscal year 2027.
This positive financial impact is expected to continue throughout the duration of the fund’s operations. The company also confirmed that there are no related parties involved in this transaction.
