Riyadh – Mubasher: Alandalus Property Company has officially entered into a long-term Tawaruq financing agreement with Saudi Awwal Bank (SAB), according to a bourse filing.
The facility, valued at SAR 48 million, is earmarked for the acquisition and development of educational infrastructure, marking a significant step in the company’s stated objective to diversify its investment portfolio and increase its footprint within the Kingdom’s private education real estate market.
The financing agreement, which was finalized on 2 July 2026, is structured as a Sharia-compliant Tawaruq facility, ensuring full adherence to Islamic financial regulations.
Under the terms of the arrangement, the credit line will be available for a total duration of eight years, commencing from the date the funds are first utilized. This long-term maturity profile is intended to align with the development and stabilization phases of the underlying real estate asset.
To secure the credit facility, Alandalus Property has provided a comprehensive package of guarantees to SAB. These include the issuance of a promissory note, a formal mortgage on the real estate asset being acquired, and a legal assignment of the future revenues generated by the project.
Such collateral structures are standard for high-value commercial real estate developments in the Saudi market, providing the lending institution with multi-layered security while allowing the developer to leverage the asset’s future cash flows.
The primary objective of this capital injection is the purchase of a designated land plot for an educational facility and its subsequent development. Once construction is complete, Alandalus Property intends to operate the asset under a leasing model.
This move is a direct implementation of the company’s strategic plan for the 2026-2030 period. This long-term corporate strategy emphasizes the diversification of the company’s asset classes, moving beyond traditional retail and commercial spaces to capture growth in specialized sectors such as education.
Alandalus Property confirmed that there are no related parties involved in this transaction. This transparency ensures that the financing was negotiated on an arm’s length basis, maintaining standard corporate governance protocols.
The company’s focus on the educational sector reflects a broader trend in the Saudi real estate market, where institutional investors are increasingly seeking long-term, stable yields through essential service infrastructure.
By securing this funding, Alandalus Property positions itself to execute the initial phases of its expansion strategy. The development of educational facilities is viewed as a defensive asset class that offers resilient occupancy rates and long-term lease agreements, which can enhance the overall stability of the company’s balance sheet. The partnership with SAB further underscores the banking sector’s continued support for real estate projects that align with the Kingdom’s developmental goals.
The company has indicated that the financing will be utilized in accordance with the project’s construction and acquisition milestones. As the project progresses from the land acquisition stage to active development, the assignment of project revenues will serve as a primary mechanism for servicing the debt over the eight-year tenure.
This disciplined approach to capital allocation is central to the company’s efforts to maximize shareholder value while maintaining a manageable debt-to-equity ratio.
This latest financial move by Alandalus Property represents a calculated expansion into a specialized niche. By focusing on the development of leasable educational facilities, the company is not only expanding its physical asset base but also diversifying its revenue streams away from more volatile market segments.
The successful procurement of this Islamic financing facility demonstrates the company’s ability to access capital markets to fund its strategic growth initiatives through 2030.
In May, Alandalus Property announced an update on its joint venture (JV) development with Masat Real Estate Company.
