EXCLUSIVE: KAEC to provide 6,000 homes by next year, says Emaar EC CEO

King Abdullah Economic City (KAEC), which was developed as a business hub on the Saudi Arabian coast off the Red Sea, will be ready with 6,000 housing units next year with more in the works, said Fahd Al-Rasheed, managing director and CEO of Emaar The Economic City.

At least 20 percent of the housing stock will be within the “affordable” bracket, Al-Rasheed estimated, as Saudi Arabia struggles to narrow the demand-supply gap in its housing sector, which still faces a shortage of 1.5 million affordable homes.

“We are now in a very strong position to help the government in its mission for creation of jobs, with the provision of affordable housing, as well as for creating new income streams from taxes, zakat, and the attraction of foreign investment in the country,” he told Argaam.

KAEC currently has 170 projects in the pipeline over the next 10 years, he added, without specifying the funds earmarked for the projects.

He said more than 100 companies— including the likes of Mars, Pfizer, and recently signed Pharmaline— have already set up their base in the industrial zone of KAEC.

Spread over 180 million square meters — roughly the size of Washington D.C. — KAEC is being built as a port and industrial hub. The $100 billion city is estimated to be complete by 2035.

The KAEC deep water port is already operational and plans are in place to increase its capacity to 20 million TEU (twenty-foot equivalent unit), Al-Rasheed said.

“The idea is we link Saudi with the West, leveraging our geographic advantage on the Red Sea and leveraging Saudi Arabia as the backbone economy for a major logistics play,” he added.

The economic city will also expand its scope to include tourism and leisure as key sectors. Plans are in place for 36 facilities to be built over the next 10 years to tap into domestic, religious, and business tourism segments.

On the anvil are theme parks, zoos, recreational parks, and hotels to match the environment, Al Rasheed added.

The city also plans to take advantage of the government’s initiative to link Mecca and Madinah with Jeddah and KAEC through a high-speed railway line.

“We have more than 16 million visitors for Hajj and Umrah and that number is expected to go up to 30 million in the next 10 years,” he said, adding that the country also has a growing need for business meeting and exhibition space.

“We are also building exhibition spaces. Our strategy is to get 1.2 million visitors by 2021. This year, 400 corporates held their offsite (meetings) at KAEC,” he said.

Emaar EC, which is leading the development of KAEC, reached breakeven in 2011, Al-Rasheed added, and has been reporting profit since. It was listed on Saudi stock exchange in 2006.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com