Knowledge Economic City Announces the Signing of a Letter of Intent jointly with its Subsidiary, Algharraa International Real Estate Development Company Limited with BSF Capital, and Fourmen Investment Co

The proposed fund will be established through a collaboration between KEC, Algharraa, and Fourmen Investment, with the possibility of additional investors participating in the fund, in accordance with the initial principles and terms set out in the Letter of Intent.

-Knowledge Economic City (Co-Investor and Co-Developer)

-Algharraa International Real Estate Development Company Limited (Co-Investor and Co-Developer)

-Fourmen Investment Company (Investor and Lead Developer)

-BSF Capital (Proposed Fund Manager)

The proposed fund will be established through a collaboration between Knowledge Economic City, its subsidiary Algharraa International Real Estate Development Company Limited, and Fourmen Investment Company, with the possibility of additional investors participating in the fund, in accordance with the initial principles and terms set out in the Letter of Intent.

The establishment of the fund and the execution of the project remain subject to the fulfillment of all applicable contractual and regulatory requirements, including obtaining the required approvals, execution of the definitive agreements, completion of the financing arrangements, and satisfaction of all relevant legal and regulatory conditions.

Based on the preliminary framework set out in the Letter of Intent, the proposed fund is expected to have a term of four (4) years commencing from its launch, comprising three (3) years for project development and one (1) year for marketing and exit, with the option to extend the fund term for two additional one-year periods, subject to the final fund documentation and the required regulatory approvals.

The financial impact will be recognized in the Company's financial statements in accordance with the International Financial Reporting Standards (IFRS), upon satisfaction of the applicable accounting recognition criteria and completion of the relevant contractual and regulatory requirements.

The proposed partnership reflects the Company's commitment to implementing best practices in structuring and managing large-scale investment projects while leveraging the specialized expertise of both BSF Capital and Fourmen Investment. The transaction is expected to diversify funding sources, attract institutional capital, accelerate project execution, maximize the value of the Company's land portfolio, and enhance long-term shareholder value.

The partnership also seeks to strengthen the project's regional and international market reach by leveraging Fourmen Investment Company's strategic collaboration with Tatweer Holding, which maintains a presence and representation offices across several targeted international markets, thereby supporting international investor engagement and broader project marketing opportunities.

Knowledge Gardens is one of the largest mixed-use developments within Knowledge Economic City. The project is strategically located in the Southeastern area of KEC, west of Prince Naif Road and south of Sheikh Ibn Baz Road, adjacent to the Haramain High-Speed Railway Station in Madinah.

The project forms part of the Company's vision to develop integrated and sustainable urban communities that enhance quality of life through modern urban planning, green spaces, advanced infrastructure, and a balanced mix of residential, commercial, and hospitality components, while supporting the objectives of Saudi Vision 2030 and reinforcing Knowledge Economic City's position as a premier investment and residential destination.

The project is planned on a net land area of approximately 332,054 square meters, distributed across four mixed-use development zones with a total Gross Floor Area (GFA) of approximately 897,542 square meters and a total Built-Up Area (BUA), including parking, of approximately 1,274,419 square meters.

The master plan includes approximately 4,198 residential units, 183 serviced apartments, a 450-hotel key, approximately 80,000 GFA square meters of commercial and office , together with a community center, mosque, kindergarten, and an interconnected network of parks and landscaped open spaces exceeding 52,000 square meters, creating a fully integrated urban destination designed to serve residents, businesses, and visitors.

Pursuant to the Letter of Intent, the proposed financial structure of the fund is based on land contribution valued at approximately SAR 1.66 billion, together with direct equity contributions, bank financing, and investments by additional investors.

The estimated total project uses are approximately SAR 7.5 billion, including land value, construction costs, indirect costs, contingencies, fit-out works, and developer fees. Based on the preliminary feasibility studies and financial projections, the project is expected to generate total revenues of approximately SAR 10.2 billion.

The proposed fund is expected to secure bank financing with a five-year tenor comprising three years for the development phase and two years for repayment from project sales proceeds, providing the liquidity required throughout the development period. The final financing terms will be determined upon execution of the definitive agreements and completion of all required regulatory approvals. Under the initial terms of the Letter of Intent, the indicative ownership structure of the fund is expected to comprise 46.2% for Fourmen Investment Company, 13.9% for other investors, and 39.9% for Knowledge Economic City and its subsidiary, Algharraa International Real Estate Development Company Limited, subject to the execution of the definitive agreements and completion of all applicable regulatory approvals.