A US $400mn joint venture (JV) agreement has been signed by The Red Sea Development Company (TRSDC) and Almutlaq Real Estate Investment Co, a subsidiary of the Al Mutlaq Group. As per the terms of the deal, the JV will develop the Jumeirah Red Sea, which is billed as a 159-key luxury resort situated on The Red Sea destination’s hub island, Shura.
Shura forms part of the first phase of development, and will comprise 11 luxury, premium and lifestyle hotels and resorts, residential units, a championship golf course, 118 berth marina, and a comprehensive retail, dining, and entertainment offering. The island is currently under construction and expected to open in early 2024.
“This joint venture investment reinforces the private sector’s alignment with our commitment to regenerative tourism and sustainable development. Our project naturally lends itself to promising business opportunities, with the ability to leverage the Kingdom’s key strategic assets, and drive economic growth and diversification as outlined by Vision 2030,” said John Pagano, CEO of TRSDC.
Tariq Almutlaq, chairman of AREIC added, “We are extremely pleased to partner with TRSDC and its best-in-class management team on this exciting and compelling project. We have been studying the giga-projects for some time, and the Red Sea is achieving its vision. The destination is coming to life, and we look forward to welcoming our first guests in 2024.”
In May 2022, Marriott and TRSDC inked a deal to debut the Ritz-Carlton Reserve brand in the region at The Red Sea project. Big Project Middle East also went behind the scenes with Grankraft who are building the Sheybarah Hotel’s overwater villas for TRSDC. In June, TRSDC and ARCHIRODON said they completed the installation of the last connecting piece for the crucial Shura Bridge project.
According to a report by Arab News, TRSDC is currently in discussions with several other investors under a similar framework to invest in The Red Sea Project’s commercial assets, including hotels and resorts, leisure, and retail and dining experiences. Moreover, AMAALA and additional soon-to-be-announced projects in the developers’ expanding portfolio bring with them additional opportunities for investors, the report said.
Jay Rosen, Chief Financial Officer at TRSDC noted, “We are attracting an abundance of third-party investment interest, particularly those focused on ESG who are confident that this is an exciting opportunity and one that they do not want to miss out on.”
The announcement follows TRSDC achieving financial close on its $3.76bn green financing earlier this year with four Saudi banks – Banque Saudi Fransi, Riyad Bank, Saudi British Bank, and Saudi National Bank.
The Red Sea Project has achieved significant progress on the ground, with Phase 1 now more than 50% complete and several key assets already fully operational, including a four-star management hotel, on-site offices, and the largest landscape nursery in the region. TRSDC and AMAALA are said to have awarded over 1,000 contracts worth in excess of $6.67bn. Work is on track to welcome the first guests in early 2023, when the first hotels will open, with the balance of phase one set to complete by early 2024, the report concluded.
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