Oct 24, 2023
Riyadh has emerged as a highly prominent city for development and modernization in the Kingdom of Saudi Arabia in recent years. The impact of giga-projects on real estate investment in Riyadh is evident and clear in their contribution to the city's growth and the real estate sector in Riyadh.
Giga-projects in Riyadh:
Riyadh has numerous major projects aimed at enhancing infrastructure, increasing property value, and promoting economic and social development in the city. On March 19, 2019, King Salman bin Abdulaziz Al Saud announced four projects exceeding 86 billion Saudi Riyals, aimed at developing Riyadh, the capital of the Kingdom. Following this, many other projects have been initiated including:
★ King Salman Park Project: One of the four major projects in Riyadh, the park covers an area exceeding 16 square kilometers, making it one of the largest urban parks in the world. The park incorporates over one million trees, open spaces covering approximately 11.5 square kilometers, and a circular path measuring 7.2 kilometers in length. The park includes:
● The Royal Arts Complex: Its area exceeds 400,000 square meters and includes the National Theater, five closed theaters, an outdoor theater, and a cinema complex with three halls. It also hosts four arts academies and an educational center dedicated to developing children's talents.
● Cultural Facilities: It encompasses seven diverse museums and event spaces spread over an area of 40,000 square meters.
● Sports and Entertainment Facilities: These facilities have a significant impact on the sports economy and real estate. They include the Royal Golf Course, virtual reality place, a skydiving and hot air balloon center, an equestrian center, a running and cycling track, an entertainment gaming zone, a water park, and a family entertainment center.
● Public Facilities and Services: Such as mosques, security centers, healthcare and educational facilities, social centers, public libraries, and parking buildings.
● Residential and hotel facilities: These facilities can fall under the category of real estate investments in giga-projects in Riyadh, as they provide:
■ Residential complexes that offer approximately 12,000 diverse housing units.
■ 16 hotels with 2,300 hotel units considered to be luxurious accommodation options in the giga-projects in Riyadh.
■ Profitable spaces for restaurants, cafes, and retail sectors covering an area exceeding 500,000 square meters.
■ Office building complexes covering an area of 600,000 square meters.
● Riyadh Green Project: The objective of this project is to enhance the city's green spaces by increasing the per capita green space to 16 times its current size. By planting over 7 million trees across Riyadh, the project aims to achieve a total green space coverage of 9% in the city.
● Riyadh Art Project: This project aims to transform Riyadh into an open art exhibition that blends modernity with heritage.
● Sports Track Project: This project aims to encourage residents to adopt healthy mobility patterns and promote engagement in various sports, particularly walking, cycling, and horse riding. The project covers a distance of 135 kilometers and includes safe and tree-lined pedestrian paths, dedicated routes for both professional and amateur cyclists, as well as tracks for horse riding.
In addition to these projects, there are many others, such as the King Abdulaziz Public Transport Project in Riyadh and the King Salman Project, which is considered one of the urban development projects in Riyadh that focuses on infrastructure and real estate.
The Giga-projects in Riyadh and the Real Estate Market:
We can consider the giga-projects in Riyadh as one of the most important factors influencing the real estate sector and property trends in Riyadh. When a large project is announced, such as the development of a specific area or the construction of new facilities, it usually leads to an increase in supply and demand in the real estate market in Riyadh and affects its value. Here are some reflections of the giga- projects on the real estate sector in Riyadh:
● The impact of Giga-projects on property prices in Riyadh: The development of major projects contributes to increasing the value of existing properties in the surrounding areas. The demand for housing, offices, and commercial spaces increases, leading to price rises.
● Provision of public services: Giga-projects are likely to include plans for creating public facilities, such as hospitals, schools, and entertainment centers. This increases the real estate attractiveness of giga-projects in Riyadh for investors and residents, leading to increased demand for properties in those areas.
● Infrastructure: When a large project is developed, there is usually an improvement in the surrounding infrastructure. This includes expanding roads, securing and improving public transportation, as well as providing other services. It also enhances the overall attractiveness of the area and consequently increases the value of its properties.
● Investment opportunities: One of the changes in the real estate market in Riyadh is the increased investment opportunities based on giga-projects that attract investors to the real estate market in Riyadh. They can benefit from the increased demand for properties to achieve good financial returns.
● Economic effects: Giga- projects contribute to enhancing economic growth, creating job opportunities, and increasing income for the population. This can lead to increased demand for properties in the city, increasing, as such, the prices there.
● Real estate development: There may be transformations in the real estate market in Riyadh due to these giga- projects, which result in the construction of new residential and commercial projects. This increases the supply of properties and intensifies price competition.
● Available housing and real estate in Riyadh: Giga- projects may lead to providing diversity in the real estate availability in the city. New residential or commercial complexes may be built. As a result, this will create various opportunities for investors and tenants in Riyadh's real estate market.
● Increased demand for commercial properties: When analyzing the real estate market in Riyadh in light of giga- projects, we observe a relationship between these projects and transformations in the commercial real estate market in Riyadh. The application of giga- projects creates a desire among many business owners to invest in surrounding or neighboring areas of these projects, resulting in increased demand and higher prices for these commercial properties.
Attention must be paid to the fact that the relationship between giga-projects and the real estate market in Riyadh depends on other factors, such as location, urban planning, as well as supply and demand in the real estate market. Sometimes, the impact can be direct and immediate in certain areas, while it may be gradual and slow in others.
In conclusion, the future and growth of the real estate market in Riyadh are inevitable as a result of the ongoing development and modernization of the city, as well as the implementation of projects aligned with the Kingdom's Vision 2030 program. In fact, this association works to strengthen several sectors, most notably the real estate one, which is witnessing extraordinary growth and expansion as one of the associated effects of giga- projects, ensuring a bright future for this sector and its investors.
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