Riyadh Development signs deal to set up JV with Riyadh Holding

Riyadh Development Co. signed an agreement with Riyadh Holding Co. to establish a joint venture (JV) to own the assets and play the role of the main developer and operator of the markets in the Qasr Al-Hukm area.

In a statement to Tadawul, Riyadh Development said the total value of the JV assets reaches SAR 1.52 billion.

The deal aims to benefit from the experience of the two companies in establishing, managing, and developing commercial and service real estate projects.

The assets are located on the lands owned by the two companies in the center of Riyadh, which include Al-Taamir Markets, Al-Muaiqiliyah Center, and Al-Dira Markets.

The in-kind contribution of Riyadh Development to Al-Taamir Wholesale Commercial Center is 46.34% of the partnership, while the contribution of Riyadh Holding to Al-Muaiqiliyah Commercial Center and Al-Dira Market is estimated at 53.66%.

The contract has an indefinite duration, the statement said, adding that the financial impact will be disclosed later after obtaining the necessary approvals.

The related parties are Prince Faisal bin Abdulaziz bin Ayyaf, Chairman of Riyadh Development and Riyadh Holding, as well as Fahad Abdullah AlKassim, board member at Riyadh Development and member of Riyadh Holding Executive Committee. This is in addition to Abdullah Al-Bahouth, board member of Riyadh Development, representing the General Organization for Social Insurance that has ownership in Riyadh Holding.

Riyadh Development's shareholders approved the establishment of a simplified joint-stock company in partnership with Riyadh Holding to develop Ad Dirah district during an ordinary general meeting (OGM) on Aug. 15, according to data available with Argaam.

The average asset valuation exercise for the partnership with Riyadh Holding to develop Ad Dirah district amounts to SAR 1.5 billion (fair value based on the latest valuation). The new entity’s portfolio comprises three commercial centers on a total area of nearly 170,000 square meters and total leasable areas close to 209,000 sqm. These centers are located in the heart of Riyadh, near Al Hukm Palace.