Cenomi Centers, GIB Capital to establish SAR 1B real estate investment fund

A Cenomi Centers facility

Arabian Centres Co. (Cenomi Centers) signed on Oct. 7 a strategic partnership with GIB Capital to establish a closed-ended, Shariah-compliant real estate investment fund with an initial capital of SAR 1 billion.

The fund will facilitate the Qassim land sale program and develop the U Walk Qassim mall, which is part of the one-million-square-meter (sqm) mixed-use Tijan scheme located in Buraidah, the retailer said in a statement to Tadawul.

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The fund will develop and market the surrounding lands for residential, offices and leisure, aligning with its ambitious investment vision for the region.

The fund may also sign partnership agreements with leading real estate developers for the purpose of developing lands within the masterplan. The land benefits from its geographic location at the intersection of major routes, including King Abdulaziz Road, which connects various parts of the city of Buraidah.

The land sale is part of Cenomi Centers’ strategic SAR 2 billion non-core assets sale program initiated in 2022 to strengthen the company’s financial position and fund its growth pipeline.

The company estimates approximately SAR 400 million to complete the U Walk Qassim mall development. The projected annual revenue from the mall, once stabilized, is around SAR 80 million.

Following the establishment of the fund, which is subject to Capital Market Authority’s (CMA) approval, GIB will assume the role of fund manager to facilitate the sale of the Qassim land and assist in securing the funds required for the U Walk Qassim development. Cenomi Centers will be the sole unitholder and will contribute to the fund with assets in-kind, along with any hard and soft costs incurred to date.

Construction of the mall is anticipated to resume in December 2024 and complete in Q4 2026. Cenomi Centers will manage and operate U Walk Qassim on completion, which will include over 135 retail stores and has a gross leasing area (GLA) of 60,000 sqm.

“Partnering with GIB Capital to create a new fund to bring forward U Walk Qassim and deliver on our SAR 2 billion non-core asset sales program, demonstrates the company’s continued success at forming strategic financing solutions to drive our company’s future growth,” said Alison Rehill-Erguven, CEO of Cenomi Centers.

“Cenomi Centers is maximizing the opportunities of operating in the attractive KSA market. 2024 will see three projects under construction including the flagship developments Jawharat Riyadh and Jawharat Jeddah, along with U Walk Qassim, ensuring we are on track to reach 2 million sqm total GLA by end of 2027,” she added.