Kingdom Holding has hired local developer Sumou Real Estate for a major land project in the Saudi capital, part of its plans to monetise its land assets.
The agreement, signed by Kingdom Holding subsidiaries Kingdom Real Estate Development Company and Trade Center Company, covers 3.07 million square metres of land in Riyadh, according to a statement to the Saudi Exchange.
Sumou will act as exclusive development manager, overseeing infrastructure works as well as the marketing and sale of land plots.
The project is expected to be developed over 36 months. It is scheduled to begin once masterplans are approved by the relevant authorities.
Total sales from the project are estimated at around SAR4 billion ($1.07 billion), subject to market conditions .
Kingdom Holding said the scheme forms part of its long-term strategy to develop its Riyadh land bank, which originally spanned 20 million square metres.
Various land reforms in Riyadh are aimed at spurring development and decreasing the cost of housing. They include amendments to the white land tax, under which annual taxes on vacant or underdeveloped land increase up to 10 percent.
Kingdom Holding, founded by Saudi billionaire Prince Alwaleed bin Talal, is listed on the Saudi Exchange and invests across sectors including real estate, banking, aviation and hospitality. Its share price increased 0.5 percent by 11am on Tuesday following the announcement.
Developer Sumou is also listed on the exchange. Its share price fell 0.5 percent by mid-morning.
Further reading:
- War tests Dubai’s off-plan property market
- Worst month for Saudi businesses since Covid-19
- Rattled Emirati investors push up Oman property market
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