Several projects, with a combined value of nearly $1 trillion, have been unveiled across Saudi Arabia since 2016, thanks to the government’s Vision 2030 strategy, according to analysis by property consultant Knight Frank.
Knight Frank said nearly $300 billion of the total spend is dedicated to new infrastructure which will include passenger rail networks and an airport in Riyadh, estimated at $147 billion and expected to be the home base for a new national airline.
“The scale of infrastructure improvements in the country is phenomenal. The aggressive targets laid out by the government around attracting 100 million annual visitors to the country by 2030 means both adequate and first-class gateways need to be created,” said Faisal Durrani, partner and head of Middle East research.
Durrani cited the new cruise terminal at Jeddah Islamic Port where the first cruise routes are already in operation, with the cruise industry set to create up to 50,000 jobs nationally, according to the Public Investment Fund (PIF).
Knight Frank also highlighted eight new cities that have been planned, mostly along the Red Sea coast, which will include 1.3 million homes, 3 million square metres of offices and 100,000 hotel rooms, with a total spend of nearly $575 billion.
A further 100,000 new homes are to be built in Riyadh by 2023, along with 3 million square metres of office space and 12,000 hotel rooms across mega projects worth $63 billion.
“Delivering these monumental projects at such speed is incredible, but clearly comes with its own challenges and opportunities,” said Durrani.
“Regulations that govern the sale and lease of all property asset classes need to be carefully looked at if the kingdom is to deliver a globally attractive investment landscape. Therein lies Saudi Arabia’s biggest opportunity: to create a regulatory framework that appeals to global blue-chip institutional investors. The investment grade assets are coming, now we just need the global capital to sit up and take note.”
Harmen de Jong, partner for real estate strategy and consulting at Knight Frank, said inquiries for development consultancy and development management services for the kingdom had increased significantly in the last six to 12 months and that the private sector now also has more clarity around how Vision 2030 will be rolled out.
“As a result, we have seen heightened activity in real estate development concepts involving hospitality, retail and entertainment,” he said.
“This trend is being further supported by the ease of access to cheap credit provided by government-backed finance agencies such as the Tourism Development Fund.”
(Writing by Imogen Lillywhite; editing by Cleofe Maceda )
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