The Qassim project, set to resume construction by December, aims to boost Saudi Arabia’s retail sector as part of Vision 2030

Cenomi Centers, a leading Saudi real estate developer, has joined forces with GIB Capital to launch a SR1 billion ($266 million) closed-end fund, targeting the growth of Saudi Arabia’s retail sector. The investment will fund the development of U Walk Qassim Mall, located in Buraidah, as part of the Kingdom’s broader strategy to diversify its economy under Vision 2030.

The construction of the mall is scheduled to resume in December 2024, with completion expected by the end of 2026. Covering 60,000 square metres and housing more than 135 retail outlets, the U Walk Qassim Mall will become a key commercial destination in the region. Cenomi, formerly known as Arabian Centers, will manage and operate the retail complex upon its completion.

The fund’s creation supports Saudi Arabia’s retail development, a sector that the government views as integral to its ambition of becoming a global tourism hub. Earlier in the year, Majid Al-Hogail, the Minister of Municipal and Rural Affairs, highlighted the importance of retail, which contributes 23% to the non-oil economy. The sector is set to surpass SR460 billion by the close of 2024.

Cenomi’s collaboration with GIB Capital, the investment arm of Gulf International Bank, brings a Shariah-compliant real estate fund into focus. The fund will not only facilitate the development of the mall but also the surrounding areas for residential, office, and leisure purposes. This multi-faceted approach will support broader urban growth in Buraidah, with the Qassim land sale programme serving as a catalyst for investment and infrastructure development.

A key advantage of the Qassim project is its strategic location, situated at the crossroads of major routes, including King Abdulaziz Road. The growing interest in the area reflects the Kingdom’s ambitions to attract urban development and investment, creating a thriving commercial centre that will complement the retail expansion.

The launch of the fund is part of a wider strategy by Cenomi Centers, which rolled out a SR2 billion non-core asset programme in 2022 to improve its financial health and drive future projects. The company has earmarked SR400 million for the completion of the U Walk Qassim Mall. Once operational, the mall is expected to generate an annual revenue of SR80 million.

GIB Capital’s role as fund manager involves securing financing for the development and overseeing the sale of the Qassim land. Having received approval from the Capital Market Authority, GIB will support the project’s financial structure and ensure the smooth operation of its funding channels.

Cenomi, as the sole unit holder of the fund, has committed in-kind assets and covered the project’s associated costs. With Cenomi at the helm, the company is positioned to leverage its expertise in managing large-scale retail and lifestyle destinations across Saudi Arabia.

Saudi Arabia’s retail sector is undergoing significant growth, aligning with Vision 2030’s economic diversification goals. The Kingdom leads the Gulf Cooperation Council (GCC) in retail expansion, with the sector forecasted to grow at an annual rate of 4.6% between 2023 and 2028, according to Alpen Capital. Saudi Arabia and the UAE are driving this surge, with Saudi retail sales expected to rise to $139.1 billion by 2028, marking a 5.1% annual growth rate.

Cenomi Centers and GIB Capital’s fund is a key player in this growth narrative, helping Saudi Arabia strengthen its position as a leading business and tourist destination. By focusing on retail, residential, and commercial development, the project will not only enhance local infrastructure but also attract international brands and visitors, furthering the Kingdom’s transformation into a global hub for commerce and lifestyle.