In a move reflecting the accelerating pace of real estate development in the Saudi capital, Asas Makin Real Estate Development and Investment Company announced the signing of a significant strategic contract with Tashyeed Hayat Contracting Company, with an estimated value of 300 million Saudi riyals. This agreement aims to execute a package of construction and contracting works for the company's projects in Riyadh.
Contract details and scope of work
According to a statement issued by the company on the Saudi Stock Exchange (Tadawul) website, the contract aims to develop land with a total area of approximately 95,000 square meters. The agreement includes the execution of all necessary construction work for residential and commercial projects according to the approved designs, on a turnkey basis, ensuring the projects are ready for immediate occupancy upon completion.
The estimated value of the contract was set at approximately 300 million riyals, with a cost-plus-fees system (Cost Plus) of 5% adopted. This model means that the final contract value will be calculated based on the actual cost of the work after project completion, thus providing flexibility and transparency in financial transactions between the parties.
Timeline and financial impact
Asas Makin clarified that the contract duration is 18 months, during which the executing company will adhere to the approved technical standards, with a strong focus on quality and safety, ensuring proper execution and addressing any hidden defects. The financial impact of this contract is expected to be reflected in the company's financial results during the execution period, with the extent of this impact depending on the progress of the work and the actual allocated costs.
Keeping pace with the urban development in Riyadh
This signing comes at a time when Riyadh is experiencing an unprecedented construction boom, driven by increasing population growth and a vibrant economic sector that has made the capital a prime investment destination. Real estate development projects that blend residential and commercial units are a direct response to growing market demand, as real estate companies strive to offer modern products that meet the needs of both residents and businesses.
Alignment with the Kingdom's Vision 2030
This step falls within the broader context of the Kingdom's Vision 2030, which places great emphasis on the housing and real estate development sector. The Vision aims to increase homeownership rates among citizens and improve quality of life by providing integrated residential environments. Real estate development companies, such as "Asas Makin," play a pivotal role in achieving these objectives by injecting substantial investments and transforming undeveloped land into vibrant urban communities.
This contract reflects the company’s strategy to expand its real estate portfolio, taking advantage of the government incentives and the attractive legislative environment that the real estate sector in the Kingdom currently enjoys, which enhances the company’s position in the local market and supports its plans for sustainable growth.
