Red Sea Housing Services said that its subsidiary, Red Sea Affordable Housing, signed on Saturdaytwo agreements with Brazilian firm Direcional Engenharia S.A.
Based on the technical services agreement, Direcional Engenharia should share its experience and know-how with Red Sea Affordable Housing to execute and develop affordable housing projects in Saudi Arabia. Progress shall be evaluated within two years of the signing date.
The Saudi-based real estate developer said the agreements come in line with its 2020 growth strategy.
The second contract is a joint services agreement, designed for the purpose of executing and developing affordable housing projects within the company’s geographical scope in Africa, the Middle East, and Australasia; subject to the consent of both parties, in light of the outcomes and results of the technical services agreement.
The allocated share capital for the JV is estimated at SAR 20 million. Red Sea Affordable Housing will finance its share through inter-company borrowings from Red Sea Housing Services Co.
Red Sea Affordable Housing Company will own 50 percent, plus 1 share of the capital.
Financial impact of the agreements has not yet been determined, according to the company. However, necessary disclosures will be made public should any material developments take place.
Direcional Engenharia S.A. is one of Brazil’s leading firms providing housing solutions in the affordable housing sector, with annual sales exceeding SAR 2.15 billion ($575 million).
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