Masar inks MoU to set up private real estate fund with SAR 221M capital

Umm Al Qura for Development & Construction Co. (Masar) signed on Dec. 30 a non-binding memorandum of understanding to establish a real estate private fund.

Al-Inma First Development Co. (SPV for Masar-owned Al-Inma Makkah Development Fund I) inked the deal with BIM Capital and Ajbal Real Estate Development Co. (AJBAL) to establish the fund with a targeted capital of SAR 221 million.

The move is in line with Masar’s development strategy, through joint ventures (JV), it said in a statement to Tadawul.

The newly established fund’s value represents the value of the land and a portion of the development cost to be injected via cash and in-kind contributions and subscriptions for the purpose of developing hotel units on a plot of land within Masar Destination.

As per the MoU, BIM Capital to be appointed as the fund manager and AJBAL as the Developer while Al-Inma First Development Co. to contribute the land plot partially at a certain percentage of its value as an in-kind contribution. The Developer on the other hand will also have in-kind and cash contributions. The final participation ratios of the parties will be determined upon the fund's establishment, the statement added.

The MoU is valid for a period of six months from the date of signing, or until the completion of the fund’s establishment whichever comes first. The agreement may be extended upon written mutual consent of the parties.

Currently there is no financial impact, and any future financial impact will be announced accordingly, the company stated.