Emaar The Economic City, the developer of the King Abdullah Economic City (KAEC) in Saudi Arabia, has sold an undeveloped industrial plot to a group of buyers, including a subsidiary of the Public Investment Fund, for 366.77 million Saudi riyals ($97.78 million) to create an industrial logistics hub.
The other buyers of the land are Dar Al Himmah Projects, Zamil Group Real Estate Company and Abdullah Ibrahim Alkhorayef Sons, the developer said on Sunday in a statement to the Tadawul stock exchange, where its shares are traded.
The investors will "develop all secondary infrastructure and create industrial logistics hub in the special economic zone", the statement said.
The payment would be made in two years and the proceeds from the sale would be directed towards the "development of infrastructure, working capital and the fulfillment of some financial commitments", it added.
Emaar The Economic City will begin recognising the revenue impact from the deal from the third quarter of this year.
KAEC, a special economic zone, was launched in 2005 as part of the kingdom's wider economic national transformation programme that aims to diversify its economy away from oil.
It focuses on advanced manufacturing and logistics, from the automotive supply chain, including assembly, as well as consumer goods, information and communications technology, and medical technology.
KAEC also includes King Abdullah Port, among the world’s 100 largest ports and the second biggest on the Red Sea.
Saudi Arabia, the Arab world's largest economy, is building several new projects as it focuses on diversifying its economy. It aims to become one of top 15 global economies by 2030.
In April, the country launched four special economic zones that will offer companies financial and non-financial incentives.
Special economic zones are geographically defined areas that support specific activities such as investment, trade and employment by providing competitive advantages and legislative frameworks that differ from the base economy.
The new zones will focus on the key growth sectors of advanced manufacturing, cloud computing, MedTech and maritime, the Saudi government said at the time.
In 2021, PIF, the kingdom's sovereign wealth fund, acquired a 25 per cent stake in Emaar The Economic City to become a major shareholder in the company.
The transaction will help both companies "leverage synergies" and further develop KAEC, officials said at the time.
