KAFD seeks $700M to fund development plans: Report

King Abdullah Financial District (KAFD)

King Abdullah Financial District (KAFD) aims to raise approximately $700 million from equity investors to finance ongoing development projects within its Riyadh-based real estate complex, Bloomberg reported, citing sources.

KAFD plans to achieve this by pooling some of its income-generating properties into a real estate investment fund (REIT) and offering a stake to investors through listing the fund on the Saudi Exchange (Tadawul). The final amount raised could reach around $750 million.

Citigroup, HSBC Holdings, and Al Rajhi Capital have been hired as advisors on the deal. However, no final decisions have been made on the agreement terms, including the potential fundraise.

Some of the proceeds would be used to fund additional development projects within KAFD. The deal also aims to revitalize the Saudi REIT sector for investors.

KAFD, one of the largest projects in Riyadh, is being built north of the Saudi capital, covering 1.6 million square meters. It includes over 2,900 residential properties and 6,100 luxury five-star hotel keys, according to data compiled by Argaam.

Saudi Vision 2030 plans to transform KAFD into a special zone with competitive regulations and rules, including visa exemptions and a direct train linking the project to King Khalid International Airport.

As of last January, Saudi Arabia began requiring global corporations to base their regional headquarters (HQs) in Riyadh to undertake government contracts. Additionally, it introduced a 30-year tax incentive package to ease these companies' HQ openings in the Kingdom.