SAUDI ARABIA —First Avenue for Real Estate Development Company has entered into a SAR 130.96 million agreement with Awj Real Estate Development and Investment Company to restructure its real estate fund investments. Under the transaction, First Avenue will transfer its entire 38.6% interest in La Perle Real Estate Fund to Awj in exchange for Awj’s entire 48.9% interest in Al Shati Real Estate Fund and a cash payment of SAR 6.35 million. The agreement was signed on 14 October 2026.
Following completion, First Avenue’s interest in Al Shati Real Estate Fund will rise from 32.7% to approximately 81.6%, while its investment in La Perle will end. The company expects to record a gain of SAR 3.56 million, although the final financial impact will be determined after the transfer of the investment units and settlement are completed. No transaction conditions or related parties were reported.
The exchange shifts First Avenue’s portfolio away from mature, income-generating properties held through La Perle and toward a land-based development opportunity in Jeddah. Al Shati Real Estate Fund holds a 15,600-square-metre plot in the Al Shati District, with a floor area ratio of 6.25, as well as approximately SAR 45 million in cash. The fund’s total assets are valued at around SAR 255.1 million, and it has no outstanding financing obligations. The land may support a future real estate development or alternative investment structure, subject to feasibility assessments, market conditions and required approvals.
For Saudi Arabia’s real estate sector, the transaction illustrates how developers can reallocate capital between stabilised assets and sites with further development potential. Greater control of Al Shati could give First Avenue more influence over decisions concerning land utilisation and future investment, while the fund’s cash holdings and absence of financing obligations provide flexibility for evaluating development options. However, the agreement does not itself confirm a construction project, development budget or timetable.
The increased ownership may also change the accounting treatment of Al Shati, potentially requiring First Avenue to consolidate the fund’s financial statements if the applicable International Financial Reporting Standards criteria are met. Any qualifying intragroup transactions and revenues could then be eliminated in consolidated accounts. The company is assessing the accounting and contractual consequences, including arrangements linked to the two funds. First Avenue’s exit from La Perle will also end its involvement in that fund’s asset management and development, subject to the relevant contractual procedures.
First Avenue for Real Estate Development is a Saudi real estate company involved in property investment and development. Awj Real Estate Development and Investment is the counterparty in this portfolio transaction, transferring its Al Shati holding and receiving First Avenue’s La Perle investment.
