First Avenue inks deal with Al Shati Real Estate Fund to develop Jeddah mixed-use project
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The partnership with the fund is said to represent a pivotal step in First Avenue's expansion strategy in Jeddah by investing in real estate opportunities within strategic locations, the company aims to solidify its position as a player in the city's real estate market
Saudi-based developer First Avenue has entered into an agreement with the Al Shati Real Estate Fund. This partnership aims to develop a mixed-use project in Jeddah, spanning 15,619sqm.
The project will be located in the Al Shati District of Jeddah, and will feature a blend of commercial, residential, and hospitality elements. This comprehensive development will contribute to the real estate landscape of the Saudi port city, the developer said.
First Avenue's stake in the project is substantial, holding units in Al Shati Real Estate Fund that collectively represent 14.9% of the fund's capital. This investment underscores the company's confidence in the project's potential and its commitment to its success.
The company has set timeline for the entire project, aiming to complete it within a three-year period. This planning ensures that the project is executed efficiently and meets the standards of quality.
Highlighting the financial aspects of the agreement, First Avenue has outlined a detailed breakdown and said that the development fee, which constitutes 12% of the actual project costs, will be determined after the final designs are approved and the necessary permits are issued. This transparent approach ensures that the financial burden is shared fairly and equitably.
The scope of work for First Avenue includes executing the project in accordance with the approved plans. This includes preparing detailed architectural designs, securing the necessary regulatory permits, overseeing the construction process, and effectively marketing the project to attract potential investors and tenants.
This partnership with Al Shati Real Estate Fund represents a pivotal step in First Avenue's expansion strategy in Jeddah. By investing in promising real estate opportunities within highly attractive and strategic locations, the company aims to solidify its position as a player in the city's real estate market.
Looking ahead, First Avenue anticipates a positive financial impact on its financial results, with the benefits expected to be reflected starting from 2026. This financial success will further fuel the company's growth and contribute to its continued success in the real estate industry.
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