Much like in Riyadh, the market for high-rise buildings and flashy office space in Jeddah is saturated. While commercial office projects are still being planned, supply is far outstripping demand and will continue to do so for the foreseeable future.
In Riyadh, The King Abdullah Financial District will attract much of the city’s business community, thereby leaving vacant much of the current office space. In Jeddah, the estimated $3bn urban development plan being touted by the municipality will include a business district which promises to do something similar.
Meanwhile, what is needed immediately in Jeddah, again, much like in Riyadh, are homes. According to the municipality, right now there is a shortage of 283,000 homes, 30 per cent of which fall into the category the municipality considers low-income or affordable. Government reports suggest that by 2020, the demand will grow to a million.
To address the need, the government is focusing almost entirely on an initiative to build around 150,000 homes in underdeveloped districts in the province and an additional 50,000 for Jeddah city proper.
In the private sector, King Abdullah Economic City (KAEC) is planning to hand over 400 units by the end of the year and another 750 in two years. And by 2015, the city will be able to house a population of 40,000 and will have begun its 23 million-square-metre second phase.
On the ground, it is fair to say Saudi nationals are frustrated. They’re tired of seeing housing masterplans launched that have completion dates of five, ten or even 25 years away. The urban centre continues to grow and sprawl as expatriates and rural villagers descend on the city in search of jobs. All the while, the number of available homes remains stagnant.
Jeddah’s most pressing social issue is also its most promising construction one. Companies looking to win work in Jeddah need to focus on building homes and making them affordable.