RIYADH: Saudi Arabia’s retail developer Arabian Centres Company, also known as Cenomi Centres, in collaboration with GIB Capital, has launched a Shariah-compliant real estate investment fund, backed by an initial capital of 1 billion riyals (approximately $266 million).
The commitment of these entities is to enhance the residential, office, and leisure sectors within Saudi Arabia.
The close-ended fund aims to facilitate the Qassim land sale programme, targeting the province northwest of Riyadh, and play a pivotal role in the development of the U Walk Qassim mall located in Buraidah.
According to disclosures made to Tadawul, the fund is envisioned as a vehicle to not only streamline land sales but also to forge strategic partnerships with real estate developers, thereby amplifying the potential for growth within the established master plan.
The land sale initiative aligns with Cenomi Centres’ broader strategy of optimizing its asset portfolio.
Shariah-compliant investments
The SAR2 billion non-core assets sale programme, initiated in 2022, is designed to bolster the company’s financial footing and facilitate the funding of its growth endeavors. Specifically, the U Walk Qassim mall is projected to require approximately SAR400 million to reach completion, with anticipated annual revenue of SAR 80 million once operational stability is achieved.
In this venture, GIB Capital, serving as the fund manager, is tasked with overseeing the sale of the Qassim land and ensuring that the necessary capital for the U Walk Qassim development is secured, pending approval from the Capital Market Authority.
Notably, Cenomi Centres will act as the sole unit holder of the fund, contributing assets in-kind along with associated costs incurred to date.
With construction slated to recommence in December 2024 and aiming for completion by the fourth quarter of 2026, the collaborative effort between Arabian Centres Company and GIB Capital situates itself as a forward-thinking strategy within Saudi Arabia’s evolving real estate market.
The initiative not only reflects the growing significance of Shariah-compliant investments but also highlights the potential for economic diversification and urban development in the region.
