Riyadh

Mall of Saudi ... set to be Saudi Arabia’s largest lifestyle destination.

Mall of Saudi ... set to be Saudi Arabia’s largest lifestyle destination.

Poised for a new era

As the kingdom gears up for a transformation with the opening up of its tourism and entertainment sectors, the Saudi capital is showing signs of an upsurge of developments catering to the new vision outlined for the country.

March 2018

Saudi Arabia is hitting headlines for the far-reaching changes taking place in the kingdom and investments that these could bring in. No wonder the capital Riyadh is at the centre of these developments.

While the $22-billion Riyadh Metro is the biggest project under way in the city, there are other giant schemes that are keeping the Saudi capital buzzing with activity.

As Saudi Arabia opens up its tourism sector and shakes off the shackles on its entertainment sector, the kingdom is witnessing an upsurge in investment in hotels, malls and leisure facililities. 

According to Saudi Arabia’s General Entertainment Authority (GEA), the kingdom will invest $64 billion in the entertainment sector in the next 10 years. The GEA’s plans have received a resounding applause, gauging by the attendance at Saudi Arabia’s first-ever jazz festival in Riyadh and other events in the Eastern Province, that herald a new era for growth in the capital and the country at large.

Meanwhile, housing and real estate developments continue to receive significant investment and with the Saudi Crown Prince’s initiatives to lift restrictions on entertainment, malls, leisure complexes and cinema halls are expected to mushroom in Riyadh, and elsewhere in the kingdom.

Last month, Italian infrastructure group Salini Impregilo won a $1.3-billion contract from the Saudi Arabia National Guard for housing and urban planning on a large scale covering 7 million sq m to the east of Riyadh.  The project involves the construction of a whopping 6,000 villas, 160 km of main and secondary roads, a sewage treatment plant and water tanks.  Salini Impregilo is already engaged on the longest line on the Riyadh Metro – the 41.5-km Line 3 or Orange Line.

Yet another deal clinched by the Italian firm last year, also for work in the capital, is a $300-million contract to redevelop the Al Faisaliah District for the Al Khozama Management Company, which in itself is a forward-focused move, given the kingdom’s drive to boost its tourism and leisure facilities.

The capital is set to see a 48 per cent increase in hotel rooms, according to figures released by STR Global, a leading provider of data benchmarking and analytics for the global hospitality industry.

According to the report, a total of 6,290 hotel rooms are now being built in Riyadh to complement the 13,104 rooms in its current inventory.

In addition, a number of malls are being built with the latest announcement having come from the Saudi-Lebanese owned real estate firm Red House, which intends to launch the first-of-its-kind outlet complex in Saudi Arabia.

Riyadh Outlet Village will be a themed multi-purpose shopping complex offering recreational, entertainment, and dining options.

The UAE-based shopping destinations pioneer Majid Al Futtaim has already initiated plans to set up two mega malls in Riyadh: the Mall of Saudi and the City Centre Ishbiliyah. City Center Ishbiliyah will feature 250 stores, a 9,000-sq-m Carrefour hypermarket, a food court and an entertainment complex.

Majid Al Futtaim is expected to release the main construction tender for the $2.8-billion Mall of Saudi project by the third quarter of 2018. The first phase includes the mall, a ski slope, a hotel and serviced apartment building and general infrastructure – although it is likely that the project will include a Cineplex, with the kingdom now allowing the opening of cinemas, which have been banned since the 1980s.

Vox Cinemas, a movie theatre chain administered by Majid Al Futtaim is said to be seeking opportunities in the kingdom.

According to news reports, Saudi Arabia’s first cinemas are expected to open by the fourth quarter of 2018. Kuwaiti National Cinema Company (KNCC) and Dubai-based distributor Front Row Filmed Entertainment are believed to have secured three locations for 27 screens in Saudi Arabia’s biggest cities – Riyadh, Jeddah and Dammam.

UK-based Vue Cinemas, which intends to build up to 30 multiplexes in the kingdom, has signed a memorandum of understanding with Saudi mall and leisure specialist Abdulmohsin Al Hokair Holding Group. Other groups with plans to open in the kingdom include Canada’s IMAX and the US’ AMC.

In line with the Vision 2030 reform plan, a 334-sq-km entertainment city has been proposed for the south of Riyadh, to feature sports, cultural and recreational facilities including a safari and a Six Flags theme park.

The kingdom’s Public Investment Fund (PIF) will be the main investor in the project, which is expected to break ground this year and open in 2022.

Other plans include a major renovation of King Fahd International Stadium in Riyadh, commissioned by the General Sport Authority (GSA). Schiattarella Associati, a leading Italian architectural firm, will oversee work on the project.

The scope of work includes renovating most parts of the stadium to help accommodate almost 50,000 spectators.

 

Riyadh Metro

Meanwhile, work on the Riyadh Metro project continues apace. Riyadh Governor Prince Faisal bin Bandar announced late last month (February) that 68 per cent of the project was complete.

 Ibrahim Sultan, member of the Supreme Commission for the Development of Riyadh City and head of the Center for Projects and Planning, said deep tunnel work ‘was almost over’ and work on bridges ‘is 98 per cent completed’. As of February 21, 86 per cent of the tracks have been laid, and the first testing of trains is expected to take place by the end of 2018.

The $22-billion Riyadh Metro is one of the world’s largest integrated public transport projects. The six lines, 85 stations (including four ‘iconic’ stations) and 176 km of track are being developed by three consortia (FAST, BACS and ANM) comprising major international engineering, procurement and construction (EPC) contractors and leading Saudi contractors.

The massive transport infrastructure project, which will include a comprehensive bus network, is seen as having a transformative impact on the city’s economy and the social mobility of its population, which is slated to grow from 5.7 million to more than 8.3 million by 2028.

The bus network will be the main feeder of the Riyadh Metro. It will also be the main means of transportation within and among Riyadh districts. A total of 1,000 buses will transport 900,000 passengers per day on 24 tracks extending over 1,200 km covering the entire city.

Turkish construction giant Yuksel is working on a SR1.9-billion ($506.3 million) contract from the Saudi government for its ambitious Bus Rapid Transit (BRT) project, which involves the construction of 34 stations, 1,353 community bus stops and six pedestrian bridges in the capital.

 

Real Estate

The recently introduced strategic reforms aimed at creating a favourable investment climate and strengthening the non-oil sector have placed a focus on real estate which is forecast to double its contribution to economic output by 2030, according to international real estate consultant Knight Frank.

In its latest report on the Saudi residential market, it says the various urban regeneration initiatives being implemented including mixed-use communities and investment in infrastructures are expected to act as catalysts for sustainable development and a more active residential market.

The Riyadh Metro will have a major impact on real estate development as it addresses the traffic congestion in the capital.

Meanwhile, the future of the ambitious King Fahd Financial District still appears uncertain. The glitzy $10-billion financial district has been plagued by construction delays, cost overruns and doubts about finding enough tenants, according to Reuters. About a fifth of the 1.6-million-sq-m site, including a sleek conference centre and a modern white mosque, was complete, the report adds.

A key project that is in the finishing stages is the 80-storey Capital Market Authority (CMA) Tower, which soars 385 m above the surrounding cityscape.  A joint venture of HOK and Omrania are the architects on the project. 

Cayan Group, a real estate investment and development company, is gearing up for the handover of the CMC commercial tower in Riyadh shortly.

Among other developments, Saudi-based Annan Real Estate is set to build Boss Office Tower, a 35-storey office tower in the heart of the capital. Annan has several key projects in the pipeline including the Almohra Plan in the north of Riyadh besides a major housing project featuring 950 residential units in the east of the capital.




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