Riyadh – Mubasher: First Avenue for Real Estate Development Company has announced the formal signing of a framework agreement with the Royal Commission for Makkah City and Holy Sites and Jadwa Investment to develop the Al Hindawiyah Al Sharqiyah district in Makkah.
The agreement, signed on 24 June 2026, establishes the operational and financial structure for a consortium led by First Avenue to transform the unplanned settlement into a modern urban development, according to a bourse filing.
The project aligns with the broader objectives of Saudi Vision 2030 and the Royal Commission’s initiatives to enhance infrastructure and quality of life within the holy city.
The signing follows an initial award announcement made on 1 June 2026, which designated a consortium of three prominent real estate firms to undertake the redevelopment. First Avenue holds a 45% stake in the consortium, followed by Dar Al Majid Real Estate (Al Majidia) with 35%, and Rikaz Real Estate with 20%. Under the terms of the newly signed framework, the consortium will serve as the exclusive developer and marketer for the Al Hindawiyah Al Sharqiyah project.
The agreement outlines a multi-party structure involving Jadwa Investment, which has been appointed as the fund manager for a private closed-ended real estate investment fund. This fund will be the primary vehicle for the project, responsible for acquiring the land and financing the development phases.
The framework agreement is set for a duration of 180 days from the date of signing, during which the parties will finalize the establishment of the fund and transition into executive agreements.
Financial terms disclosed by First Avenue indicate a performance-based compensation structure for the consortium. The developer fees are set at 15% of the actual project costs, which will be finalized once detailed engineering studies and approved design plans are completed.
Additionally, the consortium is eligible for a performance incentive equivalent to 14% of returns exceeding an 8% target internal rate of return (IRR) for the fund.
A brokerage fee of 2.5% of total project sales has also been established.
First Avenue noted that while the project is expected to yield a positive financial impact throughout its development stages, the exact magnitude and timing of these returns cannot be determined with precision at this stage.
A more accurate financial outlook will be provided following the formal establishment of the investment fund, the signing of the definitive development agreement, and the approval of the final cost structures.
The disclosure also highlighted several related party transactions within the consortium’s leadership. Board member Abdul Salam Al Majid serves as the Managing Director of Al Majidia, while board member Khalid Al Qahtani serves as the Chairman of Rikaz Real Estate. These relationships have been noted in accordance with regulatory transparency requirements for listed companies on the Saudi Exchange.
The Al Hindawiyah Al Sharqiyah project is part of a larger strategic effort by the Royal Commission for Makkah City and Holy Sites to revitalize informal neighborhoods.
By improving urban planning and infrastructure, the project aims to increase the investment value of the area while supporting the Kingdom’s goals for sustainable urban growth and improved housing standards for residents and visitors to Makkah.
The consortium’s role involves comprehensive management of the development lifecycle, from initial planning to final marketing. By leveraging the expertise of First Avenue, Al Majidia, and Rikaz, the project seeks to capitalize on the high demand for modern residential and commercial spaces in the vicinity of the Holy Mosque.
Further updates regarding the fund’s activation and the commencement of construction are expected in the coming months as the framework period progresses.
