Knowledge Economic City Company and Kaden Investment Company have signed a memorandum of understanding to develop Multaqa Al Madinah 2, a SAR 2.5 billion ($666.16 million) mixed-use scheme on a 92,043 square metre plot in Madinah. The project will be delivered through a closed-ended real estate fund in which KEC holds 75 percent. Definitive agreements have not yet been signed.
What the fund is being set up to build
The scheme extends the first phase of the Multaqa Al Madinah district on a plot immediately to its north, and it is dense. Against a site of 92,043 square metres, KEC’s disclosure to the Saudi Exchange puts estimated gross floor area at about 229,117 square metres, a plot ratio close to 2.5 to one. It was reported that the initial concept comprises roughly 1,527 residential units spread across three residential zones, commercial and office components with a net leasable area of about 31,108 square metres, and clubs, recreational and service facilities alongside landscaping for the central park next to the site.
Only about 14 percent of the floor area is therefore income-producing commercial space, which shapes how the money comes back. Residential units are planned for sale, including off-plan sales during construction. The commercial and office elements are to be built for lease and operated until occupancy and trading stabilise, followed by a planned exit through sale. On the headline figures, the SAR 2.5 billion total implies roughly SAR 10,900 per square metre of gross floor area, or about $2,900.
Where the SAR 2.5 billion actually comes from
The structure is the substance of this announcement, and it is more revealing than the headline number. KEC and Kaden intend to use a closed-ended real estate investment fund regulated by Saudi Arabia’s Capital Market Authority, with KEC contributing the land in kind for 75 percent of the fund units and Kaden making a cash contribution for the remaining 25 percent. Kaden also takes the development manager role. Zawya named Capital Hill as fund manager.
The filing detail matters. TradeArabia’s account of the bourse statement put the initial land valuation at about SAR 692.3 million ($184.6 million) and total equity required for the project at about SAR 832.7 million. KEC expects to receive SAR 67.7 million in cash plus fund units valued at about SAR 624.6 million once definitive agreements are executed, subject to regulatory approvals and completion of the land transfer. Those figures tie: the cash and units together equal the land valuation, and Kaden’s 25 percent share implies a cash contribution of roughly SAR 208 million on the filing’s own arithmetic.
That leaves the larger question unanswered. Equity of SAR 832.7 million covers a third of the stated SAR 2.5 billion project value, and neither the filing nor the reporting on it identifies the source of the remaining SAR 1.67 billion, which would conventionally come from a mix of development finance and off-plan sales receipts. The land valuation works out at about SAR 7,520 per square metre. This is also a memorandum of understanding rather than a binding agreement, and no contractor, consultant, construction start or completion date has been disclosed.
Why a CMA fund, and why that structure works in Madinah
Ownership rules inside the sacred boundaries explain the vehicle. Property in Makkah and Madinah was historically restricted to Saudi nationals, and the CMA moved in November 2021 to permit CMA-regulated real estate funds and Tadawul-listed companies with foreign ownership to hold real property in the two cities, with the Real Estate General Authority relaxing foreign investment rules further in March 2023. From 1 February 2026 the CMA also opened the Saudi market to all categories of foreign investors, alongside updated controls on real estate ownership by listed vehicles.
A CMA-regulated fund holding Madinah land is therefore not an accounting convenience. It is the route through which international capital can take exposure to it. KEC has said its zone is one in which eligible non-Saudi buyers may own property under recently approved regulations, and the company is regulated by the Economic Cities and Special Zones Authority rather than as a conventional developer.
The third land monetisation deal in under two months
Multaqa Al Madinah 2 is not a one-off. In mid-July 2026, KEC signed a non-binding term sheet with Albilad Capital for a closed-ended private real estate fund to finance the first cluster of its Multaqa Hospitality project, a SAR 1.5 billion scheme comprising a 288-key JW Marriott, a 327-key Marriott and about 295 branded residences, connected to Multaqa Mall and the Hilton towers by a pedestrian skybridge. Days later it signed a development agreement with Alrashid Properties for Multaqa Residences, under which Alrashid funds and builds the entire project at an estimated SAR 2.6 billion excluding land, against expected revenues of SAR 5 billion over a 54 month implementation period, while KEC retains the land.
The land pricing across those deals is worth comparing. KEC valued the 149,520 square metre Multaqa Residences parcel at SAR 9,000 per square metre, an indicative SAR 1.35 billion against a book value of roughly SAR 94 million. The Multaqa Al Madinah 2 plot two months later carries an initial valuation about 16 percent lower per square metre, in the same district.
Financial pressure gives the pattern its logic. KEC posted a net loss of SAR 34.9 million for 2025 on revenue of SAR 319 million, then a SAR 15.4 million loss in the first quarter of 2026 and a SAR 12.9 million loss in the second, with second quarter revenue down 51 percent year on year to SAR 29.9 million. The SAR 67.7 million of cash due on signing is more than twice that quarterly revenue figure. Set against paid-up capital of SAR 3.4 billion, a SAR 2.5 billion project is roughly three quarters of the company’s capital base, which is precisely why it is being built with someone else’s balance sheet.
Madinah’s pipeline and the comparables
KEC’s masterplan runs to 6.8 million square metres inside Madinah’s sacred boundaries, about 5 km from the Prophet’s Mosque and 8 km from Prince Mohammed bin Abdulaziz International Airport. Chief executive Dr Moath Al-Yahya told Gulf Construction that the plan is sized for around 200,000 residents and 42,000 hotel rooms, with more than 11,000 rooms currently in the pipeline across five districts, and that the opening of Multaqa AlMadinah Mall is the next major milestone. In February 2026 the company also announced a partnership with Indonesia’s Archipelago covering a 2,600-room, eight hectare property in Madinah targeted to open in early 2028.
Scale puts the new project in perspective. CRO’s coverage of Rua Al Madinah, the Public Investment Fund scheme east of the Prophet’s Mosque, described a masterplan across 1.35 million square metres, roughly 15 times the Multaqa Al Madinah 2 site, and its developer targets 47,000 hotel rooms by 2030 as Saudi Arabia works toward hosting 30 million Umrah pilgrims. On cost intensity, The Avenues-Riyadh, a $4 billion retail-led development with a built-up area of 1.87 million square metres, works out near $2,140 per square metre against roughly $2,900 here, a gap consistent with a residential-heavy programme carrying higher fit-out and unit density than a mall podium. Riyadh’s $2 billion Diriyah mixed-use district awarded to China State Construction Engineering Corporation offers a further reference point for how Saudi developers are packaging large urban quarters.
Three things remain open. Definitive agreements are unsigned, CMA approval of the fund and the land transfer are outstanding, and no delivery team has been named.
Project at a Glance
- Project Name: Multaqa Al Madinah 2
- Location: Multaqa Al Madinah district, Knowledge Economic City, Madinah, Saudi Arabia
- Project Value: SAR 2.5 billion ($666.16 million), per KEC’s statement to the Saudi Exchange, 8 September 2026
- Client/Owner: Closed-ended real estate investment fund, 75 percent Knowledge Economic City Company and 25 percent Kaden Investment Company
- Site Area: 92,043 sq m, immediately north of the first phase of Multaqa Al Madinah
- Gross Floor Area: About 229,117 sq m
- Key Components: About 1,527 residential units across three residential zones, commercial and office space with about 31,108 sq m net leasable area, clubs, recreational and service facilities, central park landscaping
- Land Valuation: About SAR 692.3 million ($184.6 million), initial valuation per the bourse filing
- Total Equity Required: About SAR 832.7 million
- Procurement Model: Land contributed in kind by KEC into a CMA-regulated closed-ended fund, with Kaden contributing cash and acting as development manager
- Commercial Strategy: Residential units for sale including off-plan, commercial and office space leased and operated before a planned sale after stabilisation
- Status: Memorandum of understanding signed, definitive agreements pending, subject to regulatory approvals and land transfer
- Construction Start and Completion: Not disclosed
Project Team
- Master Developer and Landowner: Knowledge Economic City Company (Tadawul: 4310)
- Development Manager and Cash Partner: Kaden Investment Company, the Riyadh-based developer behind Riyadh Front and Business Gate, founded 2015
- Fund Manager: Capital Hill, as named in KEC’s disclosure
- Regulator, Fund: Saudi Capital Market Authority
- Regulator, Development Zone: Economic Cities and Special Zones Authority
- Main Contractor: Not yet awarded
- Architect: Not yet disclosed
- Chief Executive, KEC: Dr Moath Al-Yahya
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