< Previous404041 Since the launch of its National Transformation Plan, the kingdom’s Vision 2030 real estate and infrastructure projects have topped $1.1tn, with Knight Frank noting that they are currently tracking 15 gigaprojects in various construction phases. Many of these projects are stand-alone super-cities in their own right. By 2030, Saudi Arabia is anticipated to have more than 555,000 residential units, 275,000 hotel keys, over 4.3 million m2 of retail space and over 6.1 million m2 of new office space, with healthcare, education and well-being contributing to an extraordinary evolution within the country. NEOM remains the largest gigaproject announced to date, and it has been recently publicised that it will house 9 million residents on completion across an estimated 300,000 new homes. However, just $7.5bn of sub-projects have been commissioned thus far, with the construction progress of this tranche of projects standing at 29%. Meanwhile, The Red Sea Project has celebrated five years since its launch and is projected to enhance the Saudi economy by $5.9bn. Focusing on sustainable tourism (or regenerative tourism), The Red Sea Project is expected to diversify the kingdom’s economy and create new jobs, approximately 70,000 by 2040. AMAALA is well-underway, along with Qiddiya, ROSHN, and the Diriyah development. AMAALA is set to complete phase one by the end of 2024, while Qiddiya recently completed the design phase for a flagship development within the gigaproject. In addition, ROSHN recently launched the apartment phase of its SEDRA community, while Diriyah is scheduled to showcase, for the first time ever, the UNESCO World Heritage site at At-Turaif. As the nation continues with its transformative vision of a vibrant society, the planned construction, according to Knight Frank, will easily make the kingdom the largest construction site the world has ever known. SHAPING THE KINGDOM By Angitha Pradeep | Images: Supplied & Shutterstock 41| ANALYSIS | 42 | ANALYSIS | 42| ANALYSIS | 43 P lans to transform Saudi Arabia are gathering pace, with both the economy and real estate landscape undergoing a phenomenal amount of change. Indeed, the kingdom is expected to be one of the world’s fastest growing economies this year, with the International Monetary Fund forecasting a GDP growth of 7.6% in 2022. Elsewhere, infrastructure and real estate project worth approximately $1tn have been announced since the unveiling of the National Transformation Plan in 2016, and these projects are quickly moving from vision to reality. The Arab world’s largest economy has recognised the need to diversify its economy away from hydrocarbons as the global green agenda drives a fundamental rethink of how we use our planet. This recognition has moved into a phase of mobilisation, and the kingdom’s bold new vision for a sustainable future is nowhere more visible than its urban landscape. Eight of the kingdom’s gigaprojects involve the construction of new cities, many of which are planned for the country’s western seaboard, along the Red Sea coast. Together, nearly $575bn is being spent to deliver over 1.3 million new homes, more than 3 million m2 of world-class offices and over 225,000 hotel rooms across Saudi Arabia, arguably unleashing the biggest development pipeline the region has ever seen. Super-cities of tomorrow The super-city NEOM will cost an estimated $500bn and is positioned as a new vision for future cities. This new metropolis will not be another smart city but one that sees cutting-edge technology being used to create one of the world’s most innovative and sustainable places. Indeed, THE LINE and OXAGON have pledged to be among the most sustainable cities in the world. create a regulatory framework that appeals to global blue chip institutional investors. The investment-grade assets are coming, and now we need the global capital to sit up and take note. Riyadh – another global hub for the Middle East Elsewhere, Riyadh is poised to become entrenched as the commercial nerve centre for the kingdom, with more than 100,000 new homes expected by the end of 2023 and close to 3 million sqm of new office space in the works, along with over 12,000 hotel rooms, spread across mega projects worth an estimated $63bn. Riyadh’s repositioning as a global hub is welcome news for the region. As it stands, the only global hub city between Cairo and Mumbai is Dubai, so it would be in the region’s interest to see another complimentary hub. History shows us that regional hub cities often compliment and support one another’s growth rather than ‘rival’ each other. The trifectas of Paris, London and Frankfurt, or indeed Hong Kong, Singapore and Kuala Lumpur, give us a glimpse of what the region’s economic landscape may look like in the future. A BOLD NEW VISION FOR SAUDI ARABIA What’s more is the excitement these projects are creating among Saudi nationals. In our 2022 Saudi Report, we found that 84% of Saudis currently renting a home would like to purchase their first home in the next twelve months. That’s a phenomenal proportion and a clear indication of how the government’s positioning of the provision of world- class housing at the heart of Vision 2030 is driving home ownership levels within touching distance of its 70% target. We also found that 41% of Saudis are keen to own a home in NEOM, with 1 in 5 saying they would like to live there and 72% likely to make a purchase. Furthermore, nearly 82% say they will be willing to pay a premium for owning a home in NEOM, and the number one reason for wanting to live in NEOM? Vision 2030. The kingdom’s new gigaprojects represent a seismic shift in not only the quantum of real estate development in Saudi Arabia, but they also spectacularly mark the birth of what could be the emergence of one of the world’s hottest new real estate markets, and Saudi nationals are alive to this fast-emerging reality. Exciting the global investment community The colossal project has been positioned as somewhat of a crown jewel in the kingdom’s transformative vision, and Saudis are thrilled by it; they have bought into it and cannot wait to be a part of it. It’s clear the embers of excitement have been lit, but now comes the challenge of delivering a new benchmark for an urban utopia. Delivering these monumental projects at such speed is incredible but comes with challenges and opportunities. Regulations that govern the sale and lease of all property asset classes must be carefully examined if the kingdom is to deliver a globally attractive investment landscape. Therein lies Saudi Arabia’s biggest opportunity: to Contributed by: Faisal Durrani, Partner – Head of Middle East Research at Knight Frank Faisal Durrani, partner – head of Middle East Research at Knight Frank.44 Conceptualised to meet the challenges of urban development, THE LINE, built on a footprint of 34km2 and able to accommodate 9mn people is the latest megacity to be unveiled as part of the $500bn NEOM gigaproject. In the words of HRH Mohammed bin Salman, Crown Prince and Chairman of NEOM TROJENA THE LINE and imaginative solutions to address these issues. NEOM is leading a team of the brightest minds in architecture, engineering, and construction to make the idea of building upwards a reality.” Built around humans, THE LINE will incorporate zero-gravity living, creating a higher-density footprint the NEOM Company Board of Directors: “THE LINE will tackle the challenges facing humanity in urban life today and will shine a light on alternative ways to live. We cannot ignore the liveability and environmental crises facing our world’s cities, and NEOM is at the forefront of delivering new Touted as the only outdoor ski-resort in the GCC region, NEOM’s TROJENA is a year-round tourist spot located 50km from the Gulf of Aqaba – with elevations ranging from 1500m to 2600m. TROJENA’s highlights include a man-made freshwater lake and ‘The Vault’. It is a folded village fusing technology, entertainment and hospitality – as the main gateway into the region. Inculcating more than 3,600 hotel rooms and apartments on completion, TROJENA will have six districts, namely Gateway, Valley, Fun, Discover, Relax, and Explore, spread across the project which is situated within an area of 1,400km2 mountainous region, of which only 57km2 will be developed. | NEOM |45 OXAGON and incorporating a richer human experience. THE LINE is anticipated to create 380,000 jobs by 2030. Saudi Arabia’s Trevi Arabian Soil Contractors, a subsidiary of Trevi Group stated that it has begun implementing the permanent foundation works for THE LINE after completing test piles in a bid to identify the best execution technology. Reportedly, Trevi is employing high-end Soilmec equipment for execution of the foundation works. The diameter of the piles are said to range from 1.5m to 2.5m, and will have an execution depth of 70m from the work surface. According to Joshua Steiner, executive director for Development and Investments at NEOM’s OXAGON, the industrial city will be the project’s first major residential development to go live, and will embody all the values of NEOM, from sustainability to liveability. Home of large-scale industrial activities such as hydrogen, water, and modular building techniques, OXAGON, once complete, will be the world’s largest floating structure – half the structure will be situated over the 600m deep Red Sea. Elaborating on the timelines, Steiner says that by 2024, OXAGON will have its first residents, while all the onshore development will be complete by 2030 and offshore development would have begun by then. Logistics solutions are expected to be in place by 2025. Soilmec SR-90 and SR-100 are currently operating on site, and Trevi has plans to employ its SR-115/SR-125 and SR-135 in the near future, the report stated, adding that Trevi is currently employing a workforce of 150 people, which will soon increase to 250, once the site starts to operate at full capacity. | NEOM |46 THE RED SEA PROJECT Saudi Arabia’s “regenerative tourism destination” The Red Sea Project is an archipelago of more than 90 islands, of which 75% will be untouched while The Red Sea Development Company (TRSDC) is developing less than 1% of the destination’s total area of 28,000km2. From sustainable farming to aviation, to offsite modular construction, The Red Sea Project has incorporated new ventures to benefit people and place. TRSDC has awarded over 1,250 contracts worth more than $8bn for its mega projects, according to its CEO John Pagano, with more than 70% of the contracts awarded to local businesses. | THE RED SEA PROJECT |47 AMAALA Inspired by Saudi Arabia’s Vision 2030, AMAALA, a unique luxury resort destination for self-discovery, encompassing three destinations: Triple Bay, The Coastal Development, and The Island. Phase one of the project is expected to be completed by the end of 2024, with AMAALA’s first development – Triple Bay – progressing steadily, with eight hotels and upwards of 1,200 hotel keys set for completion. Situated on the north-western coast of Saudi Arabia, the Triple Bay Marina edges the gigaproject to its goal of becoming an international yachting hub. Set over four levels and 7,900m2, the Triple Bay Yacht Club will house lounges and restaurants, as well as a 120-berth marina for vessels up to 130m long within the 4,155km2 Triple Bay. International design firm HKS Architects is master planning the Triple Bay and The Coastal Development. Additionally, AMAALA also noted tangible progress across the development, with over 300 contracts signed to date, worth in excess of $1.7bn. In addition, more than 98% of the total contract value has been awarded to Saudi firms, which highlights the gigaproject’s commitment to strengthening the local economy. Additionally, $1.62bn of contracts are currently out to tender, across 54 proposals. Work is underway to progress the enabling infrastructure and groundwork required to develop the destination with more than 2,400 staff already on site and 9.9 million manhours logged to date. This also includes the successful completion of 11km of roads while the Triple Bay entrance is expected to be completed by October 2022. The first section of the Construction Village, which will be home to 5,000 construction workers, is now operational, while additional two sections are in progress to provide accommodation for a further 10,000 workers. Secondary infrastructure works are also in progress for the development of the first phase of AMAALA’s accommodation at the Employee Village in Triple Bay, set to accommodate nearly 20,000 employees who will eventually operate the destination. Construction on the destination’s transport links have also commenced, with the airside infrastructure works for the destination’s new airport progressing on schedule. The contract includes the development of the airport’s 3,150m runway, taxiways and aprons, alongside additional infrastructure. In addition to key infrastructure construction, AMAALA is breaking ground across its tourism offering. Bulk earthwork is in progress, with nearly 50% of the total fill quantity completed to date in key super plots. This includes the AMAALA Yacht Club, the Red Sea Marine Life Institute, The Marina and the Wellness Core, as well as three of the first hotels. AMAALA will operate with a zero-carbon footprint, powered by renewable energy with no connection to the national grid and will not send any waste to landfill. Anticipated to be completed by 2027, AMAALA will offer approximately 3,000 hotel rooms across 25 hotels as well as high-end retail establishments, fine dining, wellness, and recreational facilities. The project is expected to create upwards of 50,000 new direct, indirect, and induced jobs for Saudis, as well as contribute upwards of $2.93bn to the country’s GDP once fully operational. | AMAALA |48 The Qiddiya project, funded by the Public Investment Fund, is being built on a 334km2 site on the outskirts of Riyadh. Based on five cornerstones: Sports & Wellness; Nature & Environment; Parks & Attractions; Motion & Mobility; and Arts & Culture; the gigaproject will support several Vision 2030 goals, including driving economic diversification, job creation, fostering a start-up culture, driving youth and female empowerment and doubling household spending on domestic leisure and entertainment. QIDDIYA By 2030, Qiddiya aims to attract up to 17 million visitors, per year contributing $4.52bn to the kingdom’s GDP and generating 25,000 jobs. Qiddiya’s Resort Core will have theme parks, entertainment and dining destination, while the Qiddiy Village will have a 24/7 mixed-use centre dedicated for sports. Qiddiya will also have the largest Six Flags Park, the largest water park in the Middle East, multi-use tracks, and other sports and gaming infrastructure. In addition, the gigaproject will also incorporate retail, dining, and entertainment venues, an art complex, and accommodate real estate growth. Slated to attract a considerable share of Saudis’ overseas tourism spending, it is expected to become an attractive destination for locals and expats while also contributing to the real estate development of the area by attracting residents to buy homes. According to the PIF, Qiddiya is expected to encompass 4000 residential units by 2025 and 11,000 by 2030. Earlier this year, Dewan Architects + Engineers completed the design for Qiddiya Water Theme Park, a flagship development within the Qiddiya gigaproject, and began construction work on the project. | QIDDIYA |49 Prior to that announcement, Qiddiya Investment Company awarded a contract worth $750mn for the gigaproject’s construction to a joint venture between ALEC Saudi Arabia Engineering and Contracting and El Seif Engineering Contracting. With sustainability at the forefront of Saudi Vision 2030, the theme park is being designed to minimise water use through recycling and smart technology in line with Qiddiya’s sustainability goals. The company has reported that some of the rides have been designed to use 75% less water compared to conventional usage. | QIDDIYA |Next >