Unlike the other developers featured in MEED’s real estate survey, Emaar EC, a Saudi stock exchange (Tadawul) listed company created from the UAE’s Emaar Properties and the Saudi Arabian General Investment Authority (Sagia), does not have a diverse portfolio, and is not looking to capitalise on high oil prices by investing beyond the kingdom.
Emaar EC is responsible for developing the centrepiece of Saudi Arabia’s entire economic diversification strategy: King Abdullah Economic City (KAEC), a $27bn 167-sq km business and economic zone. KAEC will have six areas: a port, a resort, educational, residential and industrial zones, and a central business district, which will include a financial island.
Located near the town of Rabigh on the Red Sea coast, 100km northwest of Jeddah, KAEC typifies the new wave of real estate developments that are being launched in the Middle East.
Value of projects: $27bn
Revenue (2007): Not available
Net profit (2007): Not available
Kenneth Lim, business development manager with Singapore-based Jurong International, which draws up masterplans for urban developments, says KAEC’s presence in the kingdom has acted as a catalyst for the real estate market.
“Right now, [Sagia] is concentrating on KAEC,” says Lim. “Because it bears the king’s name, it really adds to the value of owning property within the economic city. Furthermore, the way that Sagia is concentrating on it, and the way it is pushing the activities there, I expect it will push the real estate market up even higher.”
Sales at KAEC are good, with Emaar EC reporting in July that residential sales had reached SR1bn.
The first phase of KAEC is the infrastructure and main road network. Bay Le Sun Village will be the first integrated residential community within KAEC, covering 2.5 sq km. Contracts have been awarded for the construction of the residential schemes.
Saudi Binladin Group won a SR1.4bn contract for the construction of 16 residential towers in Bay Le Sun Village, and Saudi Oger has been awarded a SR494m for four further towers.
Emaar EC’s workforce is 64 per cent of Saudi nationals, with a total of 5,000 professionals and labourers working on KAEC. This is set to increase to 10,000 within the next year.