Partnering for Redevelopment

What is the current progress with the redevelopment projects you have taken on across Jeddah?

The mandate of JDURC is the development of unplanned settlements, or slum areas, within the city. Jeddah has around 53 million sqm of unplanned settlements, which emerged many years ago when there was no city planning. One of those areas was Ar-Roweis in the middle of the city in a prime location, surrounded by developed areas and close to the waterfront. This project actually started with attracting the private sector to participate in the development, and several development organizations and companies participated. We have worked hard to move residents to another location that is acceptable and an upgrade to their quality of life. The difference is paid from the development fund, and we do not expect them to pay it back; it is to support and encourage them. It took us a while to develop the fund and convince the developers to finance that fund, but we have now reached almost the final stage where we have an approved master plan from the Minister of Municipality and Rural Affairs (MOMRA), and we have developed the detailed infrastructure design.

What other projects are occupying JDURC these days?

We are working in two big projects. The first one is the heart of Jeddah, which is located in the old airport and is an area of around 850,000sqm. We have been working on this project for more than two years; we did a full study and reached the stage now where we have completed the master planning and design of the infrastructure and some of the anchor buildings in the project. The project will have some buildings that are unique in Jeddah, mainly the 175,000sqm multi-modal station that will be the main metro station in Jeddah and will have two major metro lines. There will also be a conference and exhibition center, which will be the largest in Jeddah. When finished, the total developed area will be more than 246,000sqm. The exhibition area alone will be 110,000sqm, which is almost the size of Dubai exhibition center. It will have other facilities like a five-star hotel with 44 floors, a 2,000-seat auditorium, and retail spaces. This reflects the 2030 Vision where we expect the tourism sector to grow. We see that Jeddah has potential to grow in this area, as right now we do not have sufficient facilities. We have already opened the bids for contractors to build the infrastructure and are almost one with the bid evaluation. We expect to start the final negotiation with the final contractor shortly.

Are you looking for private investors to join that project?

JDURC is going to develop all the infrastructure, which includes underground utilities, landscaping, a beautiful lake with fountains, and water canals. Then we have special purpose vehicles (SPVs) for the conference center, commercial space, and business park, as well as opportunities to invest in hotels, a medical center, and other facilities. The remaining residential developments will be sold to the private sector. The other project we are starting is the Murooj development east of Jeddah. This is a large site that is well located on the two major highways connecting Jeddah and Mecca through our site, and it is only 20km away from the airport and 42km away from Mecca. We created an SPV with private developers, to transfer development of all the residential space, which is 22 million sqm out of the total 132 million; the value of that land is our contribution to the SPV. The private sector is paying around 30%, or SAR1.6 billion (USD426 million), and the remaining will be funded through banks and presale, including the Public Investment Fund, which is providing infrastructure finance of SAR6 billion (USD1.6 billion).