Saudi Arabia will allow foreigners to own property in one of the four cities it is currently planning to construct, say media reports.
King Abdullah Economic City, named after the head of state, will be the first freehold city in Saudi Arabia, built by government-controlled Emaar Economic City, at a cost of about $27 billion to be completed in 2025, Bloomberg reported.
Under the new Economic Cities Act issued in May, foreign investors, individuals and companies will be able to buy property. Saudi officials are busy putting the act into regulations and a land registry is likely to be prepared soon, said the report.
The city to come up near Jeddah is designed to house two million people and generate a million jobs.
King Abdullah Economic City is part of a $400 billion plan announced by the Saudi government in 2008 to invest in its infrastructure and make the country less dependent on the oil industry, besides meeting its population growth, which doubled since 1986 to touch 25 million.
The new city will have the Red Sea’s biggest port and an industrial district where French oil company Total SA and US chocolate maker Mars will operate, the report said.
King Abdullah Economic City will be spread over 65 square miles. “Over the next five years we expect to spend more than $4 billion developing infrastructure and assets in the city. This won’t be done by us alone, but with other partners,” said Al-Rasheed, chief executive officer of Emaar Economic City.
About 40 families already live in King Abdullah Economic City and Emaar Economic City plans to hand over 470 houses to buyers this year in the project’s first phase. The second stage, which includes homes for 40,000, is scheduled for completion in 2014.
However, the economic crisis has hampered the progress of the city project. The company was forced to delay construction of 16 towers because customers delayed payments.
Emaar Economic City has attracted mostly middle income buyers, prompting the company to start its 22,000 unit Hawadi housing project a year earlier than planned.
The firm is also planning a 16-tower building which will be started in six months after the project is redesigned and re-tendered to take advantage of declining construction costs, Al Rasheed said.
Emaar Economic City has also announced plans to prepare infrastructure for 2.5 million square meters of industrial land in the city after completing 1.5 million square meters. It is also developing 100,000 square meters of office space for the project.
The other three cities under construction are Knowledge Economic City in Medina, Jazan Economic City in Jazan and Prince Abdul Aziz bin Mousaed Economic city in Hail. Two more economic cities are planned in Tabuk and the Eastern Province.
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