Real Estate Investment in Medinah, Saudi Arabia

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by: Ryan Samuel
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Date: Wed, 18 May 2011 Time: 5:59 AM

The Knowledge Economic City (KEC) in Madinah, was launched by King Abdullah, Custodian of the Two Holy Mosques, in June 2006 and will meet the growing housing demand in the holy city and stimulate investment in real estate in the region. It will develop tourism services linked to the commercial area, including ‘The Gardens of Light,’ the shopping area and world-class tourist sites. According to the KEC, more and more residential projects are needed in Madinah to cater to the needs of the ever-growing population and the increased number of visitors to the city. Madinah is the 2nd holy city in Islam, and the first capital of the Islamic civilization. It was the home of Prophet Mohammed (peace be upon him) and his burial place. The population in the Prophet’s City stands at one million, but is expected to more than double by 2020, according to research. The potential for religious tourism in the region is one of the main stimuli behind real estate investment in Medianh and Saudi Arabia as a whole.

Plans include a special residential area close to the Holy Mosque, a purpose built business district that will attract financial, commercial and service institutions. Other key aims will be to encourage advanced infrastructure to enable maximum production and an environment that motivates human creativity. Build a community that relies on the knowledge industries and has the economic ability to grow and prosper in KEC, generating further investment in business and real estate.

Dr Sami M Baroum, chairman of KEC, says between six and eight million Muslims visit Madinah every year and the number is expected to reach 34 million by 2024. In addition, Dr Baroum points out that Madinah’s population has recently crossed the one million mark and is officially the fourth largest city in Saudi Arabia, growing ahead of the national average at around 3.4% per year and expected to double in the next 20 years. These key economic and population indicators make for a very favourable climate for investors looking at Saudi Arabia. KEC’s location will make it unique due to its strategic position within the holy city zone, next to the train station and international airport. It is connected to all the major highways and main road network in Madinah. It will enjoy a 3.5km frontage on both sides of King Abdulaziz road which links it directly to the holy mosque and is envisioned to be the first route for the planned public transport project.

The impact on the Medinah’s economy will be hugely significant according to Dr Baroum, who says the first and most important effect will be in attracting investments – especially in the knowledge-based clusters – that result in creating more and better job opportunities. This will further increase demand from the local workforce for real estate in the city and generate additional levels of investment and prosperity. “It will also set higher standards for education, residential, commercial and hospitality real estate developments, which will eventually elevate the quality of life and economic prosperity of the city. Finally, KEC is envisioned to serve as the new ‘gateway’ to Madinah due to its strategic location on the main axis connecting the airport, train station with the holy mosque.” In addition, the government is planning for a public transport solution that will connect the train station, KEC and the holy mosque to become the most efficient access for visitors and residents alike. The complete development plans make for an exciting investment proposition for local and global investors in real estate.

About the Author

Chris Johnson is the author of this article on Investing. Find more information on Saudi Arabia here.

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