KSA & Giga Projects – Signs of a Strong Recovery

Last year was a positive one for the Kingdom of Saudi Arabia as its retail sector highlighted that it was recovering well after some difficult times. Combined with the fact its real estate market is expected to register a compound annual growth rate (CAGR) of almost ten per cent during 2022-2027 and the future is looking good for the Kingdom. Here, RLI takes a look at a selection of retail real estate schemes that are ensuring a return to pre-pandemic times and those that are aiming to make the future even brighter.

Saudi Arabia’s retail sector saw an increase in space and a strong recovery in domestic demand during the first half of 2022 as pandemic restrictions have eased, a report by the real estate management firm JLL showed.

Relaxations in Covid-19 restrictions have triggered a recovery in domestic demand for retail in Saudi Arabia, which has led to a significant increase in retail space in the Kingdom. Riyadh currently has 3.3 million square metres of retail area, followed by Jeddah, which went from 16,000 to 1.7 million square metres and Makkah, which increased from 17,500 to 1.4 million square metres in the first six months of 2022. With lesser travel restrictions, Saudi Arabia is expected to meet its goal of attracting 12 million foreign visitors, which will boost retail sales further.

According to JLL’s latest Global Real Estate Transparency Index, the Kingdom maintained its position in the top 50 global rankings, boosting its position at a regional level. It ranked 49 on the index and following an excellent 2022, the outlook for the Kingdom of Saudi Arabia looks very encouraging for 2023 and beyond. The projects highlighted below are just a microcosm of what is happening across this unique region.

Projects Across the Kingdom of Saudi Arabia
Shumoul Holding Co. (Shumoul), a subsidiary which is 55 per cent owned by Kuwaiti developer Mabanee and 45 per cent owned by Al Fozan Holding, is undertaking the construction of a mixed-use complex in Riyadh, Saudi Arabia. The project involves the construction of 1.7 million square metre mixed-use complex on a 390,000sq m area and being developed in multiple phases. The project includes the construction of a shopping mall, a five-star hotel and a four-star hotel both consisting a total of 500 rooms, the residential building comprising 1,050 units, medical building including 240 medical clinics, office space, commercial facilities, 18,000 vehicle parking spaces and related facilities. The first phase of the scheme was inaugurated last year, with the company saying the scope of work for phase one of The Avenues – Riyadh comprised the mall, parking area, gardens and internals roads.

Being developed by Azad Properties and on course to open this year after the initial launch ceremony took place recently, the Souq7 development in Jeddah, Saudi Arabia celebrates legacy and culture in an entirely reimagined souq setup. It reflects modernity and innovation in line with Vision 2030, while also embracing the Middle East’s originality, stimulating the senses and inciting a sense of discovery. Following the “one-stop-shop” motto where shoppers can find anything and everything they want under one roof, Souq7 will be divided into seven main zones coming together in a beautiful mosaic that forms an all-encompassing lifestyle and retail space. The zones are food stuff zone, the family entertainment zone, an electronics zone, furniture & home supplies zone, building material zone, automotive zone and a multi-use zone. Spreading over 728,000sq m of space, Souq7 will feature 4,000 shops, around 7,000 parking spaces, 108 buildings and five mosques.

1364 will be a world-class shopping, dining and entertainment centre that offers Saudi society a place to express and fulfil their modern desires. The 1364 shopping centre will be a location as unique as the Diplomatic Quarter itself, with extensive greenery and water features to ensure that the project is an extension and continuation of the Diplomatic Quarter, with well blended contemporary architectural practices and a modern, attractive merchandise mix to attract young professionals and families from all over Riyadh. Set to bustle with energy and activity, day and night; there will always be something new for guests to discover at the 1364 site, from live music, casual bites, play areas and an extensive cultural scene, 1364 springs to life, offering ever-changing activities for families and trendy meeting places that create the ultimate social scene. The scheme is scheduled to open in the last quarter of this year by developer Unified Real Estate Development Co.

An unrivalled lifestyle opportunity, The Bellevue by developer Unified Real Estate & Development Company is Riyadh’s largest mixed-use masterplanned project, located over 100,000sq m within Riyadh’s booming northern corridor. Envisioned as a new epicentre of suburban culture and industry, Bellevue is a place for like-minded people to live, work, shopping, learn and play. At the heart of Bellevue will be a major retail and lifestyle hub, offering a varied and evolving mix of shopping, dining, civic and cultural experiences over 90,000sq m of proposed floorspace. Their vision will be delivered over a multi-year horizon as they grow with the community of Bellevue and the surrounding burgeoning region and it all starts this year.

Recent CGIs of the Knowledge Entertainment City Hub bring to life how this 392,000sq m mixed-use district in Madinah, Saudi Arabia, will undoubtedly become one of the top visitor destinations in the world. Under development by Knowledge Economic City, the KEC Hub is an exciting and dynamic urban district offering the largest and most diverse shopping, dining and entertainment venue as part of the wider masterplan, for this globally significant pilgrimage destination. The development’s 129,000sq m shopping and entertainment centre includes a series of glass-covered atria and streets containing a range of shops, restaurants, cafes, a cinema, family entertainment centres and a wellness clinic. A vibrant, open-air restaurant boulevard provides a pedestrianised, family-friendly dining experience and a central civic square will provide spaces for events and relaxation, shops, restaurants and cafés. KEC Hub also delivers a 350-key, five-star hotel and 65 branded residences for the Hilton brand. The design concept for KEC Hub by Chapman Taylor was inspired by the charm and character of the traditional arabesque architectural style of the region. The construction of this socially and economically significant development began in 2021, with the scheme to be completed in mid-2024.

The Madinah Gate project is part of the Knowledge Entertainment City Hub and is being designed as the first development project linked to a railway station in the Kingdom and the project will include a four-star hotel tower to be operated by HDT (Hilton Double Tree), with 275 hotel keys, 50 suites & serviced apartments along with 23,000sq m retail space that is connected to the train station and bus station. DLR Group has been appointed as a leading consultant on this project as one of the leading architects and designers in similar projects around the world.

Still under construction by Jeddah Economic Company and lined strategically along the coastline of the Red Sea, Jeddah Economic City is design to embody a new point of view in what a mega city is all about. The City in mind is planned to breathe life into the Northern area of Jeddah, attracting investors, tourists, as well as business opportunities that will break global records, becoming the first of its kind in city life. Planned to occupy a spectacular area of 5.3 million square meters of land, the Jeddah Economic City is envisioned to reflect a new era in urban development and living, providing the inhabiting community with all that is needed in amenities, facilities, residential quarters, business areas in shops and commercial centres, in addition to diplomatic quarters. The Super Regional mall, to be called Jeddah City Mall and due to open in 2024 and be 490,000sq m in size, will be carefully designed within the City grid, laced with the convenience of restaurants, cafes, public parks, in addition to the routes connecting them, resulting in the perfect shopping experience to all commuters, tourists, visitors and business people alike.

Jawharat Jeddah mall is one of the modern centres in the city of Jeddah, which aims to establish a diversified centre as a new and integrated destination for entertainment and shopping with the latest international brands. Set to open in the first quarter of next year by developers Cenomi Centers, Jawharat Jeddah Mall will be built on a land area of 170,746sq m and include a GLA of 87,145sq m. The entertainment on site will be spread over 17,475sq m and the mall will include more than 200 stores and have space for over 3,000 cars.

Another mall being constructed by Cenomi Centers is Jawharat Riyadh, which will be the latest and most modern destinations for the residents of Riyadh and will contain the most luxurious international brands with areas dedicated to entertainment to improve and enrich the experience of visitors in the market centres. This mall is being developed on a land area of 505,509sq m and will have a GLA of 148,389sq m. Set to open in the quarter of 2025, the mall will feature an entertainment area of almost 40,000sq m, be home to more than 350 international, regional and local brands and have space for more than 6,000 cars.

Saudi mall developer Arabian Centres Company (ACC) has signed a lease and investment agreement to develop Jawharat Al-Khobar Mall and mixed-use commercial facilities (hotel and offices) on 300,000sq m of land located north of Al-Khobar city in Al-Kurnaish district. The company said in a stock exchange statement that it plans to build the mall in the coming six months with a budgeted development cost of between $266M to $346M. The mall will have between 130,000 to 150,000sq m of gross leasing area (GLA). The upcoming development is anticipated to open between the second half of 2025 and the first half of 2026.

Dubai’s Majid Al Futtaim has signed an agreement with global infrastructure consulting firm AECOM to help mastermind the development of the retailer’s North Riyadh Mall, its flagship project in the Kingdom which is scheduled for opening in 2026. AECOM will be the lead design consultancy on the project and supervise construction of the mall, which is expected to consist of about 600 stores across 300,000sq m of gross leasable area. At present, half of the space has been reserved by retailers. North Riyadh Mall will also include the largest ski slope and snow park in the Middle East, luxury hotels and branded residences covering about 2,000 keys and on a 214,000sq m area. The mall will also include a Carrefour hypermarket and 31 VOX Cinema screens, including the world’s largest IMAX and a Magic Planet.

Saudi Arabia’s Public Investment Fund (PIF) has revealed its plans for THE RIG, a tourism project inspired by offshore oil platforms, which will be located in the Arabian Gulf, 40km from land. THE RIG project will span an area of more than 150,000sq m and provide a multitude of hospitality offerings, adventures and aquatic sporting experiences. It is part of PIF’s strategy 2021-2025 to further strengthen Saudi Arabia’s international entertainment and tourism offering. This project is a unique tourism attraction, expected to attract tourists from around the world while being especially popular with citizens and residents of the GCC countries in the region, the PIF said. It will feature a number of touristic attractions, including three hotels, 11 world-class restaurants, 800 hotel rooms, helipads and a range of adventurous activities, including extreme sports. The first tenders on the scheme were launched in Q2 last year but to date no opening date has been announced.

Solitaire by developers Al-Marqab Investment Company is set to be Riyadh’s newest multi-use lifestyle destination and will consist of three aboveground levels of retail, food and beverage, entertainment, wellness and sport offerings and three levels of basement parking. Within the city of Riyadh, Solitaire will occupy a 60,000sq m area bordered by King Abdulaziz Rd, Al Imam Saud Ibn Faisal Road and Al Thumamah Road. Directly opposite is the Kingdom Hospital and views to the south reveal the prestigious King Abdullah Financial District, affirming this prime location within the city. The North Ring Road is just 2km away, making the asset easily accessible from Riyadh’s outer suburbs. As a multi-use lifestyle destination with design work by Benoy, Solitaire’s focus is on providing a unique, 360° lifestyle offering encompassing the key areas of retail, dining, entertainment, wellness and sport. An opening date has not yet been announced.

Infiniti is set to be a timeless destination for upscale 360° lifestyle experiences. Specializing in building high-end modern developments, ranging from residential to commercial, Ajdan brings contemporary luxury living to the most prominent locations in Saudi Arabia, the GCC, and beyond. With a sharp eye for state-of-the-art design and an unwavering commitment to creating spaces that bring the outdoors inward, Ajdan is at the forefront of innovation in MENA real estate. The towers have been designed with each and every resident in mind, giving all residential units a view of the Arabian Gulf; rest assured knowing that the sea will accompany you all throughout your day. Each tower is complete with an infinity pool and modern landscape design. With 45,510sq m of property, an upscale F&B area, contemporary high-end residential towers and cutting-edge amenities, we’ve designed a living destination that puts your mind at ease. Situated in AlBahar District, Khobar, you’ll find yourself right amidst the liveliness of the new downtown with exciting destinations like SEVEN Entertainment, Dhahran Expo and Saudi Aramco. An opening date for the scheme is yet to be announced.

Voyager – Giga Projects – A Vision Like No Other

The Saudi Vision 2030 was announced by Crown Prince Mohammed bin Salman in 2016 and seeks to transform Saudi Arabia to diversify the largest economy in the Middle East away from its historic dependence on oil. Over the coming pages RLI will take a closer look at the five major giga-projects under construction across KSA as well as a selection of mega-projects that are also being built in the Kingdom.

The Saudi Arabia giga-project program is the world’s largest civil infrastructure engineering program covering the development of residential, industrial and tourism projects in the Kingdom. The program is the centrepiece of the Saudi Arabia 2030 Vision aimed at transforming the Kingdom into a tourism and entertainment hub while creating hundreds of thousands of new jobs.

These upcoming giga-projects are designed to create new ecosystems, unlock new sectors and are heavily enabled by and promote technology and knowledge in Saudi Arabia. The idea behind them is to stimulate the economy and their benefits are expected to expand significantly beyond the real estate and infrastructure sectors, helping to diversify the economy away from oil, especially given their sheer scale. They support the Kingdom’s economic transformation efforts and promote investments in several sectors, while achieving high returns over the medium and long terms.

The Five Saudi Arabian Giga-Projects
Diriyah
As part of the Kingdom’s 2030 Vision, the Diriyah Gate Development Authority (DGDA) is transforming Diriyah into what will become the world’s largest cultural and heritage destination. Located 15 minutes from Riyadh, Diriyah will become the world’s largest cultural and lifestyle mud city. Celebrating 300 years of Saudi Arabian history and heritage, Diriyah is destined to become a world-class lifestyle destination with Saudi’s greatest collection of museums and cultural attractions, luxury international hotels and resorts and luxury retail, leisure and dining experiences. Built in the fifteenth century and listed as a UNESCO World Heritage Site in 2010, it was here that Diriyah’s ruling family lived under the leadership of Imam Mohammad bin Saud, the forefather of Saudi Arabia’s current King, the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud. A SAR 65bn cultural and lifestyle development, inspired by the timeless Najdi architecture of At-Turaif, Diriyah is the ancestral home of the Royal Family of Al Saud, the birthplace of the Kingdom. In December last year the first element of the giga-project launched to the public, that of Bujairi Terrace, a collection of 21 globally renowned restaurants over a 15,000sq m area. The historical area and the birthplace of the Kingdom houses the exciting new restaurant hub and meshes together rich culture, modernity and world-class dining. On full completion, Diriyah will become Saudi’s premier lifestyle destination to visit, live, work, shop, dine and celebrate the wonder of the Kingdom’s rich heritage and culture.

NEOM
Launched in 2017 by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud and with a name that means “new future”, NEOM stands as the flagship project of Vision 2030 and post-oil diversification plans. As a $500bn mega-city of the future, it aims to become an international hub for a wide range of sectors and services. Completion is scheduled for 2030, but with a 26,500sq km site and 450km of coastline, growth and development of the area is expected to continue well beyond then. Located on the north-western edge of Saudi Arabia, the site is in proximity to Egypt, Jordan and Israel and eventually aims to incorporate territory from neighbouring countries. The region has particularly favourable climatic conditions, with temperatures roughly 10° cooler than the GCC average. NEOM, which is 5,000-year-old region, connects three continents – Asia, Africa and Europe – will see 95 per cent of the whole land transformed to be a nature reserve. Saudi Arabia’s NEOM has released what visitors can expect, according to the latest facts shared by the city’s chief executive officer Nadhmi Al-Nasr. According to Al-Nasr, NEOM is currently developing 15 islands as phase 1, followed by a full mobility system, the “largest marina on Earth” and is also focused on renewable energy. The three mega-projects NEOM is focused on is The Line, Oxagon and Trojena would reportedly generate an estimated 380,000 jobs and add SAR180 billion to the overall GDP of the Kingdom.

Qiddiya
Qiddiya, a multi-billion-dollar entertainment destination in Riyadh, is set to be the world’s largest entertainment city. Qiddiya will be a disruptive destination recognised on the world stage as the home of the most innovative and immersive experiences. Its wide range of offerings will be based on the five cornerstones of sports & wellness; nature & environment; parks & attractions; motion & mobility and arts & culture, making Qiddiya the capital of entertainment, sports and the arts, not just in the Kingdom of Saudi Arabia, but of the world. Family-friendly theme parks, sports arenas suitable for international competitions, academies for sports and the arts, concert and entertainment venues, racetracks for motorsport enthusiasts as well as outdoor and adventure activities alongside nature and environment experiences are just some of the fun attractions being developed. Qiddiya will also include a variety of real estate options and community services. In short, Qiddiya will be a place that enables the youth of Saudi Arabia to fulfil their ambitions. It will be a place where they enjoy, appreciate, aspire, advance and nurture their potential; a place that unlocks opportunities and new professional pathways to help build a more prosperous and progressive society. Qiddiya is being created to provide the youthful society of Saudi Arabia with opportunities in entertainment, sports and the arts, whilst capturing the imagination of the world. By unlocking new professional pathways and catalysing the development of creative industries, Qiddiya will be known as a place of innovation and inspiration.

ROSHN
Unlike Saudi’s other giga-projects, ROSHN is delivering new urban communities across the kingdom. Backed by the PIF, the real estate developer is creating its communities in cities such as Riyadh, Jeddah, Al Kharj, Al Hofuf, Al Qatif, Makkah and Abha. These feature pedestrian-friendly ‘living streets’, green spaces and retail and entertainment outlets, as well as hospitals, medical centres, mosques and sports facilities. Having been established in 2019 by Saudi Arabia’s sovereign Public Investment Fund (PIF), ROSHN specialises in developing integrated urban neighbourhoods featuring residential communities with modern standards across the Kingdom. The idea behind the project’s launch was to meet the demand for new housing supply while developing integrated neighbourhoods, localising international best practices, incorporating the latest technologies in construction and enhancing the quality of life. As a Saudi giga-project, ROSHN creates comprehensive communities to elevate the standards of living in Saudi Arabia and contributes to the objectives of VISION 2030, including enhancing the quality of life for the Kingdom’s residents. Soon after launching in November 2020, the real estate giant unveiled its first project, a community in Riyadh. Spread across 20sq km, the megaproject comprises more than 30,000 homes and is an integral part of ROSHN’s 10-year mandate to develop communities across the Kingdom. In August 2021, the project was named “SEDRA”. The mega development is strategically located north of Riyadh, south of King Khalid Airport and within close proximity to Princess Nourah University. The giga-project also aims to raise the rate of homeownership to 70 per cent in the country and the design of SEDRA is inspired by Salmani architecture.

The Red Sea
Red Sea Global is behind The Red Sea, another giga-project in Saudi Arabia with a focus on eco-tourism. The Red Sea is a crossroad of land and sea with a rich cultural backdrop full of fascinating history. Formerly known as the Red Sea Project, The Red Sea is on track to welcome its first visitors in 2023. It is billed as the world’s most sustainable luxury tourism destination. With plans to become the world’s most responsible developer, Red Sea Global is exploring and implementing ideas such as green concrete to limit emissions, clean mobility strategies and sustainable food production. The destination will, of course, be powered by 100 per cent renewable energy. In 2021, Red Sea Global partnered with biotechnology firm Blue Planet Ecosystems (BPE) to produce seafood sustainably on-site. Directly employing 35,000 people, the project showcases the landscape and rich cultural heritage of the Red Sea Coast. Upon completion in 2030, the destination will comprise 50 resorts, offering up to 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites. The destination will also include luxury marinas, golf courses, entertainment, leisure facilities and an international airport. The project is being developed over 28,000sq km along Saudi Arabia’s west coast including more than 90 islands. The site also features mountain canyons, dormant volcanoes and ancient cultural and heritage sites. The destination will include hotels, residential properties, leisure, commercial and entertainment amenities, as well as supporting infrastructure that emphasizes renewable energy and water conservation and re-use.

Mega-Projects Under Construction
Saudi Arabia is one of, if not the most, ambitious countries in the world and away from the five headline giga-projects that are under development, there are a number of mega-projects that are also part of the Saudi Arabia Vision 2030. These mega-projects are set to change not only the Kingdom’s landscape but in many cases, the day-to-day lives of residents too.

AIUIa is at the forefront of the Vision 2030 plan initiated by the Saudi government to modernise the country, with the project part of a series of major schemes to diversify its economy and raise its profile from an international perspective. AIUIa is being developed as a living museum and a global destination for history, heritage, cultural and ecotourism with an emphasis on sustainability and community-inclusivity, offering visitors an immersive and responsible experience. The region encompasses more than 200,000 years of unexplored human history including the Nabataean city of Hegra, Saudi Arabia’s first UNESCO World Heritage Site; the ancient North Arabian Dadanite and Lihyanite Kingdoms, whose scripts contributed to the evolution of the Arabic language; and AlUla Old Town, a stopping point for pilgrims from 1100CE.

Meanwhile the AMAALA mega-project along the Red Sea, in the Tabuk province, will border the city of NEOM and The Red Sea within the Prince Mohammed bin Salman Natural Reserve, helping to establish a new luxury tourism destination. AMAALA will be home to more than 3,000 hotel rooms across 25 hotels. It will also boast 900 residential properties and retail, dining and wellness facilities. In September 2022 it was announced that more than 300 construction contracts worth in excess of $1.7bn have been signed to date. AMAALA is due to complete in 2027. Its first phase, Triple Bay, is scheduled to finish in 2024. It includes eight resorts with more than 1,300 hotel rooms and it will be a place where guests will be able to reach new levels of wellbeing with its holistic, comprehensive wellness offer.

The Saudi Arabian government has announced plans to build a new mega project, a 400-metre-high cube-shaped skyscraper named Mukaab as part of its Murabba downtown plan in Riyadh. Set to be built to the northwest of central Riyadh, the 19sq km development is being planned as a new downtown area for the Saudi capital city. Described as the “new face of Riyadh”, it will be built around the Mukaab structure, which will be “one of the largest built structures in the world”. It will contain two million square metres of shops, cultural and tourist attractions and have an almost full-height atrium space that will contain a spiralling tower. The Mukaab skyscraper forms part of the wider Murabba district announced by Saudi crown prince Mohammad bin Salman, chairman of the newly formed New Murabba Development Company. The wider development will contain over 100,000 residential units and 9,000 hotel rooms along with more than 980,000sq m of shops and 1.4 million square metres of office space when it is fully open in 2030.