Assessing Middle East Real Estate Projects
Assessing Middle East Real Estate Projects
Saudi Arabia Segment by Haitham Katkhuda.
The Middle East is seeing a transformational period in its development. Leaders are confident, with the Saudi Crown Prince Mohammed bin Salman (MBS) stating that the region will be the new Europe in 2018. Several projects are planned across multiple countries, and the pace is picking up.
Saudi Arabia
King Salman Park
Tucked away behind the skyscrapers of Riyadh, work is underway on a project to transform the heart of the Saudi capital by developing the world's largest urban park.
Founded in 2019, this climate-friendly initiative supports realizing the 2030 Vision. The project aims to enhance the city’s green cover, mitigate urban heat, and establish an attractive urban area with events and activities.
Notable features of the project include:
Over 1 million trees to be planted.
A total area of 16.7 km2.
Over 70% green areas.
In 2023, the King Salman Park Foundation announced the launch of the King Salman Park Real Estate Development Fund. Totaling an investment of $1.6 billion, the Fund aids in developing 1,500 residential units overlooking the park and offers a rich variety of cultural, arts, entertainment, sports, and commercial facilities.
King Salman Energy Park (SPARK)
Spanning 50 km2 in the Eastern Province, SPARK aligned with Vision 2030, which aims to diversify the Kingdom’s revenue streams and integrate clean and renewable energies. Spark Utilities offers fully integrated smart grid and digitalized services and low carbon footprint utilities, along with other utility services. This mega project reflects Saudi Arabia’s commitment to energy transition.
As SPARK progresses, it anticipates creating 100,000 jobs and contributing more than $6 billion annually to GDP. SPARK has completed 80% of its first phase, which consists of infrastructure, roads, utilities, and real estate assets established across 17 km2.
Miskan
Miskan, a major real estate developer, is collaborating with a major investor to form the Aral Real Estate Development Company. It aims to build high-end villas and large-scale residential compounds in strategic areas to target attract locals and foreigners.
In addition, collaboration with the National Housing Company of Saudi Arabia allowed Miskan to expand and offer units in Jeddah and Medinah. The company’s long-term strategy focuses on energy-efficient design principles, renewable energy integration, and responsible resource management.
Why does this matter?
Energy and Environment – These developments allow Saudi Arabia to redefine its landscape of energy sector and extend its regional influence. It also means diversifying sources of revenue and supporting new sectors that contribute to the energy transition and digitization.
While the Kingdom still relies heavily on hydrocarbons to meet its high energy consumption, it has tremendous solar capacity and aims to harness its potential to generate 50% of its power from green sources by 2030.
Job Creation – The 2023 Deloitte report on Middle East real estate predictions highlights an 8% increase in the Kingdom’s employment in financial and business services since before the pandemic.
Meeting Demand – Major projects are meeting the desires and needs of the world. An increasing number of international corporations, like BlackRock, are establishing their regional headquarters in Riyadh. Also, private-public partnerships and investments have opened the door for the real estate sector to boom. The sector’s contribution to GDP reached 5.9% in the fourth quarter of 2023.
United Arab Emirates
Dubai Creek Tower
Announced in 2016, it was planned to be 1,300 meters tall but was revised to be slightly shorter than the Burj Khalifa. It resembles a minaret, highlighting Islamic architecture, and is being constructed as part of a wider Dubai Creek Harbor, a project with 500,000 sqm of open space, 7.4 million sqm of residential space, and 0.7 million sqm of serviced apartments.
Burj Binghatti
Poised to be the tallest residential ‘hypertower’ in the world, it comprises over 100 stories of two and three-bed units. It features diamond-shaped spires, forming a crown at the top. It will include world-class amenities and services such as daycare, bodyguards, chauffeur, and chef.
Palm Jebel Ali
Twice the size of the popular Palm Jumeirah, it will be powered by renewable energy and include over 80 resorts and homes, 68 miles of coast, golf courses, theme parks, shopping malls, and more.
Kuwait
Silk City
Designed to deal with overpopulation, the megacity is expected to cost $134 billion and take 25 years to complete. It aims to construct the next tallest building in the world, at 1,001 meters tall, with 234 floors and capacity for 7,000 people. The city will also include an Olympic stadium, nature reserves, and much more. It will be divided into four quarters: financial, leisure, cultural, and ecological.
Kuwait National Railroad
This project is a part of the $25 billion Gulf Cooperation Council (GCC) railway project, which will link member countries together. The Kuwait portion will be 145 km long. It will increase connectivity within the country and across borders, reducing travel times and enhancing economic development.
Oman
Rathath Boulevard
With a value of over $100 million, a timeline of 4 years, and an area of 470,000 sqm, the project will be a vibrant recreation hub, featuring artificial waterways, commercial zones, theatres, and event spaces.
Rimal Park
This 225,000 sqm project will cost around $20 million and involve resorts, an entertainment city, and attract 15,000 weekly visitors. It aims to create around 350 jobs. It, along with other projects, is part of the Oman Vision 2040, which aims to transform Oman into a sustainable, technologically advanced country.
Bahrain
King Hamad Causeway
This $3.5 billion project will be the second causeway connecting Bahrain and Saudi Arabia at 25 km long. It aims to reduce congestion at the existing King Fahd Causeway, which sees around 11.5 million cars crossing every year. This will increase connectivity between the two countries and across the region overall.
Recommendations
Ensure Generational Sustainability
The Gulf Cooperation Council (GCC) is already aligned on economic diversification away from natural resources. To solidify this, member states should hold a conference to align their respective national visions and ensure that every project is self-sufficient, contributes to GDP, and reduces dependency on oil and gas.
Prioritize Mixed-Use Developments
Development authorities must not limit themselves to single-use projects. To exceed national visions quicker, mixed-use projects should be pursued. Residential areas must be near workplaces and entertainment areas.
In addition, different zones can be created, each serving a purpose. For example, family neighborhoods should be distinguished from working professional areas, allowing for a balance of quiet and bustle. This will create exceptional livability, expand commerce, and provide citizens with choice.
Preserve Culture and Heritage
Authorities should create a balance between modernity and traditionalism, being careful not to overshadow the wonders of the world. In fact, heritage sites should stand out to the world, which will attract tourists with specific tastes. One idea is to set a minimum threshold for development to include an icon of the past.
Support Local Enterprises
Local enterprises contribute significantly to their respective economies. The model of Saudization and Emiratization should be followed across nations, providing citizens with jobs, training, and income to raise families. This involves prioritizing citizens when it comes to procurement and hiring.
However, authorities should still allow for international entrants to conduct business, as they bring with them different perspectives and ideas that can create synergies with locals.
Create Community Funds
Each community must have its source of funds. As such, a percentage of revenues should be earmarked for specific uses, such as emergency expenses, ecological conservation, green buildings, community services, and business incubation, to name a few.
Conclusion
The Middle East is undergoing a remarkable transformation, driven by visionary leadership and ambitious real estate projects. Saudi Crown Prince Mohammed bin Salman's assertion that the region will become the new Europe underscores the confidence and determination of Middle Eastern leaders to reshape their economies and societies.
Across multiple countries throughout the Gulf region, mega projects are not only reshaping skylines but also driving economic diversification and innovation. As the pace of development accelerates, it is crucial to maintain a focus on sustainable growth, inclusive urban planning, and leveraging cutting-edge technologies. By addressing the challenges and seizing the opportunities, the Middle East can truly realize its potential and emerge as a global hub of progress and prosperity.
