The Saudi Economic and Development Securities Company (SEDCO Capital), in its capacity as manager of the SEDCO Capital REIT, announced a significant strategic step: the signing of a sale agreement for the Al-Jazira Residential Complex property in Riyadh, for a total value of SAR 100.75 million. This transaction underscores the success of the fund's investment strategy and its ability to identify and develop real estate opportunities.
Details of the deal and the financial returns achieved
In its statement published on the Saudi Stock Exchange (Tadawul) website, the company disclosed detailed financial information reflecting the strong performance of the real estate asset since its acquisition. The property was purchased in May 2018 for SAR 67,465,000, meaning the current sale price represents a 49% capital gain compared to the purchase price. Furthermore, when comparing the sale price to the property's book value recorded in the latest audited financial statements (June 30, 2025), which was approximately SAR 63.8 million, the transaction reflects an immediate gain of 55%.
The returns were not limited to price differences; the property also generated consistent cash flow throughout its holding period, with total rental income recorded from acquisition to the aforementioned date reaching approximately SAR 53.3 million. Combining the sale price with the rental income, the total proceeds from this investment amount to approximately SAR 154 million, representing a total return of 228% on the initial acquisition cost. This highlights the fund's efficient management in maximizing returns for investors.
The recovery of the real estate market in Riyadh and its impact
This deal takes on particular significance when viewed within the broader context of the real estate landscape in Saudi Arabia, specifically in the capital city of Riyadh. Riyadh's real estate sector is experiencing rapid growth, driven by the objectives of Vision 2030, which has positioned the capital as a major hub for global investments, companies, and talent. This economic dynamism has led to increased demand for residential and commercial real estate assets, directly contributing to the rise in property valuations of existing properties. This explains the dramatic price surge achieved by Al Jazeera Residential Complex in just a few years.
Asset Recycling Strategy and the Future
SEDCO Capital explained that the divestment of this asset is part of a flexible strategy aimed at improving the fund's financial position. The company intends to use the proceeds in two main ways: first, to reinvest capital by targeting new, high-quality real estate assets capable of generating sustainable income; and second, to potentially use a portion of the liquidity to partially repay existing bank facilities, which will reduce financing costs and increase net returns for investors. This event is expected to positively impact the fund's financial results in the coming period once the regulatory procedures for the transaction are completed.
