CITYSCAPE JEDDAH 2011: Experience Real Estate
FIRST DAY AT JEDDAH INTERNATIONAL URBAN DEVELOPMENT AND REAL ESTATE INVESTMENT EVENT DOMINATED BY MAJOR ANNOUNCEMENTS THAT GIVE A PEEK INTO THE FUTURE OF SAUDI ARABIA
Jeddah, June 2011: HRH Prince Misha’al bin Majed bin Abdulaziz, Governor of Jeddah, inaugurated the Jeddah International Urban Development and Real Estate Investment Event, which is organized by IIR Middle East and National Exhibitions Company (NEC) for the third time.
“The first day was dominated by major announcements, which comes as no surprise to us considering the dynamics of the Saudi real estate market,” said Deep Marwaha, Group Director of IIR Middle East. “Our conference attracts high level decision makers from Saudi Arabia, the region and the entire world. In particular, the attendance of regional companies from the UAE gives proof to the point that the Saudi market has matured and has become interesting for foreign investors.”
It is expected that Jeddah will receive a significant number of the 500,000 affordable housing units as part of the stimulus package announced by the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz.
As a result, major announcements during Cityscape Jeddah yesterday came from companies with projects in Jeddah.
Mawared Real Estate Company, a subsidiary of Aloula Real Estate Development Holding, announced its latest project Aloula Residential Community, which is a proposed residential and mixed-use development project located on a 280 hectare site North of Jeddah. At the same time, Kinan announced its 3 million square meters fully serviced residential community “Masharef” in North East Jeddah.
The importance of Cityscape Jeddah and the growing importance of the Saudi real estate market for regional developers are highlighted by the fact that Damac Properties chose the exhibition as the launching pad for its new luxury real estate projects in Jeddah and Beirut. Cityscape Jeddah is a major event on Damac Properties’ calendar, due to the company’s landmark high rise Al Jawharah project on the Corniche. At 48 storeys Al Jawharah will be one of the tallest towers in Jeddah and among the tallest developments in the country.
Another major participant, Emaar Middle East, chose Cityscape Jeddah to highlight the rapid progress achieved on its two master-planned communities, Jeddah Gate and Al Khobar Lakes, and the unique Emaar Residences at the Fairmont Makkah.
The economic cities in Saudi Arabia are envisioned to be catalysts for economic as well as social development in the Kingdom. One of the most important, Knowledge Economic City (KEC), is leveraging its participation in Cityscape Jeddah to highlight the phase one components of Dar Al Jewar, the first residential community in Madinah, and the progress it is making in its efforts to cater for the increased demand of the rising population of the Kingdom’s fourth largest city.
“KEC’s participation in Cityscape provides a great opportunity for interested visitors to know more about the existing investment opportunities within KEC and how to be engaged as a developer, investor, and operator,” said Khaled Tash, VP-Marketing & Sales at KEC. “In addition, KEC will reveal its first gated community project Dar Al Jewar so that future residents can learn more about the community, its components and the units.” He continued by saying: “We have witnessed interesting developments during Cityscape Jeddah over the last few years, but while in the past most projects were still future visions, this year we are seeing projects that are actually implemented.”
One of the highlights at Cityscape Jeddah exhibition is the Makkah Gate Project, a partnership project between Sumou Real-Estate Company and Al-Balad Al-Ameen, the development arm of Makkah Municipality. Located 13km from the Holy Mosque and occupying an area of 83 million square meters, the master plan includes a complex for various governmental departments, commercial, business and residential neighborhoods, a university, a conference and exhibition center, a medical complex, a 25 square-kilometer national park, entertainment centers and a museum.
Eng. Essam Kalthoum, CEO of Bawabat Makkah said “The development of the project will be done in stages during the next 15 years and Cityscape is an important platform for us to connect with the various real estate expert and developers who will work on the project, as well as providing us with the opportunity to showcase our future plans and projects.”
Cityscape Jeddah also represents an opportunity for consultants to showcase their services.
“Deloitte has maintained a permanent presence in the Middle East for 85 years with Saudi Arabia being one of our most important markets. Therefore, Cityscape is a key event for us since it enables us to showcase our dedicated real estate and consulting services to our loyal clients and the Saudi business community in general,” said Robin Williamson, Managing Director-Real Estate FAS for Deloitte. “This year Cityscape Jeddah has a real business purpose about it and delegates and exhibitors are thinking seriously about real opportunities that will help Saudi Arabia’s ambitious growth plans over the next decades.”
One of the biggest announcements came from Atkins during day one of the exhibition.
“We have been participating in Cityscape Jeddah since the inaugural event in 2009 and it has become an essential part of our conference calendar. This year is particularly important because we are celebrating the successful registration in the Kingdom of our partnership with the highly respected architect Mohamed Harasani. We will have offices in Riyadh, Jeddah and Al-Khobar, and we are keen to employ talented local engineers and architects to support our growing business,” said Nassib Al Sibassi, Resident Director of Atkins, Kingdom of Saudi Arabia. “As always, Cityscape Jeddah is a great platform for showcasing our expertise and raising our profile among leading decisions makers from ministries, private developers and investors. We are excited to be playing a role in supporting the vital infrastructure development in the Kingdom and this event brings together our clients, partners and suppliers at an important time for the sector.”
Cityscape Jeddah has become a platform not only for regional developers that invest in Saudi Arabia but also for regional developers announcing their projects outside of the Kingdom. TAMEER Holding Investment LLC, announced the completion of its SR 1.7 billion superstructure with its 91-storey, 355 meters high Elite Residence project, set to claim landmark status in Dubai Marina when completed later this year.
Tomorrow, the Real Estate Summit will go into its second day. In the context of the opening day’s panel on Accessing and Securing Sustainable Project Finance from regional and international banks, Wael Jundi, General Manager of Radic SinoGulf Holding said:
“Real estate project finance used to be a main obstacle to real estate expansion in the Saudi market. We should not only blame the banks for this since the track record of development companies over the last few years did not encourage banks to consider this sector despite the clear demand and boom. Moving forward, we feel that banks are now more interested in financing real estate.”
He went on to say: “However, a bankable project instead of name lending is required from both developers and financers prospective. A bankable project should be a project focusing on the real demand segment in the market, with no or limited infrastructure risk, reasonable leverage, where land is already secured and the project is fully funded through equity and debt from the first day without relying on pre-sale as a source of funding. This will open the door to major players in the local market and the region to respond to the real estate boom in the market and start developing finished products that suit the requirements of Saudi families.”
Commenting on the potential of public-private partnerships (PPPs) in real estate in Saudi Arabia during the Real Estate Summit, John Davie, Chairman Altra Capital said:
“The best model for PPP in Saudi Arabia may be adapted from the annuity-based DBFO model typified by the Private Finance Initiative (PFI) in the UK, Japan and Malaysia. Saudi Arabia should, perhaps, embrace partnerships between the public and private sectors to meet the needs of a rapidly increasing population. PPP can lead to new ideas and resources that can be focused on developing the social infrastructure necessary to evolve from a hydrocarbon based economy to a wider knowledge-based economy. PPP offers such huge potential.”
Davie concluded: “The private sector can create high quality knowledge-based jobs for the growing population within a framework that is supported by the public sector; which in turn would develop the ability to ensure the quality of its increasing social infrastructure. PPP represents improved opportunities to administer and develop the economy alongside a job-rich, flourishing and industrious private sector. Private sector involvement in the provision of public services is not new but the PPP model enables and encourages a greater depth of such involvement. If done properly it epitomizes a win-win scenario.”
Competing for the Cityscape Awards, last night Algosaibi and AFM Consultants, Emaar Middle East LLC, Rayadah Investment Company and Skidmore, Owings & Merrill, were shortlisted for two categories: Commercial & Retail Project Award and Residential Project Award (Future). Injaz Development Company, Suhaimi Holding Company and AFM Consultants, Sumou Real Estate
Development Company were shortlisted for Best Urban Design & Master Planning Award.
Sponsors of Cityscape Jeddah 2011 include; Sumou Real Estate, Principal Sponsor; Ewaan, Founding Sponsor and Al Oula Real Estate, Gold Sponsor and Raysan Arabia, Silver Sponsor.