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RIYADH: The Red Sea Development Co. has signed a joint venture agreement worth SR1.5 billion ($400 million) with Almutlaq Real Estate Investment Co., a subsidiary of Al Mutlaq Group.

Under the agreement, the two companies will develop the Jumeirah Red Sea, a 159-hotel luxury resort located on the central island of the Red Sea destination, Shura, which is currently under construction and scheduled to open in early 2024.

The island is part of the first phase of development and will include 11 luxury, upscale and lifestyle hotels and resorts, residential units, a championship golf course, a 118-berth marina and a comprehensive retail, restaurant and entertainment business.

The strategic partnership marks the first JV established by TRSDC.

“This joint venture investment reinforces private sector 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 indicated by Vision 2030,” said John Pagano, CEO of TRSDC.

“We are extremely pleased to partner with TRSDC and its top management team on this exciting and compelling project. We have been studying giga-projects for some time, and the Red Sea is realizing its vision. The destination is coming to life and we look forward to welcoming our first guests in 2024,” said Tariq Almutlaq, President of AREIC.

Investor interest

TRSDC is in talks with several other investors in a similar framework to invest in The Red Sea Project’s commercial assets, including hotels and resorts, leisure and retail and dining experiences. Additionally, AMAALA and other soon-to-be-announced projects in the developer’s expanding portfolio offer additional opportunities for investors.

“We attract an abundance of third-party investment interests, particularly those focused on ESG who believe this is an exciting opportunity and one they don’t want to miss out on,” Jay said. Rosen, CFO of TRSDC.

Green financing

This announcement follows TRSDC’s financial close on its SR14.120 billion ($3.76 billion) green financing earlier this year with four major Saudi banks (Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National bank). As the first-ever Riyal-denominated green finance, TRSDC received the Project Finance Deal of the Year award at the Capital Markets Saudi Arabia Awards 2021, as well as the Best New Project Finance award from green loan at the 2022 International Finance Awards.

The Red Sea project has demonstrated significant progress on the ground, with Phase 1 now over 50% complete and several key assets already fully operational, including a four-star management hotel, on-site offices and the largest landscape nursery of the Region.

TRSDC and AMAALA have awarded over 1,000 contracts worth over SR25 billion. Work is on track to welcome the first guests in early 2023, when the first hotels will open, with the rest of the first phase expected to be completed in early 2024.