Emaar.E.C expands size of King Abdullah Economic City project
[Wednesday, October 11, 2006 2:21:00 pm]
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Emaar the Economic City (Emaar.E.C) has significantly expanded the size of its largest-ever development in the Middle East, King Abdullah Economic City (KAEC) in Saudi Arabia, by nearly four times to cover an area of over 168 million sq metres and unveiled a new masterplan.
The Tadawul-listed company has modified the KAEC masterplan to make substantial additions to its six major components – the Port, Industrial District, Central Business District (including commercial, mixed-use, retail and Financial Island), Resort, Educational Zone and Residential (including corniche and souks).The expansion will help generate more employment opportunities for Saudis, enhance foreign direct investment and boost the Kingdom’s economy.
The Emaar.E.C board of directors met on Tuesday in Jeddah and approved the ambitious growth programme in addition to outlining the scope of expansion of the various zones within the project.
“King Abdullah Economic City is the single largest private sector development in Saudi Arabia and has been inspired by the vision of The Custodian of the Two Holy Mosques King Abdullah bin AbdulAziz AlSaud to energize the Kingdom’s economy,” said Mr Mohamed Ali Alabbar, Chairman, Emaar.E.C. “King Abdullah had instructed that the project must serve the largest possible number of Saudis and expand in its size and scope of operations accordingly.”
KAEC is expected to usher in a new era of economic prosperity to the Kingdom. Saudi Arabian General Investment Authority (SAGIA), the body responsible for inward investment to the Kingdom, is the prime facilitator of KAEC.
Following the expansion, the project has the potential to generate one million jobs for Saudi citizens and will serve as home to two million residents. The jobs created will be in industrial and light industries (330,000); research and development (150,000); business and office (200,000); services (115,000); hospitality (60,000) and education and community services (145,000).
KAEC is situated on a greenfield site on the Red Sea coast. It offers easy access to the two Holy Cities of Makkah and Madina and is also near to Jeddah. “We are creating a new nerve-centre for global businesses that look at Saudi Arabia for the investment opportunities provided by the Kingdom,” said Mr Alabbar.
“This aligns with the vision outlined by The Custodian of the Two Holy Mosques King Abdullah bin AbdulAziz AlSaud to make the Kingdom among the top 10 most competitive nations in the world by 2010,” added Mr Alabbar. “United Nations Conference on Trade and Development (UNCTAD) has already ranked Saudi Arabia number one in inward foreign direct investment in the Arab world.”
“This expansion is a landmark move for Emaar.E.C, which has gained the trust of the Saudi citizens,” said Mr Nidal Jamjoom, Chief Executive Officer, Emaar.E.C. “Every component of the project is being scaled up corresponding to the addition of the land. This expansion will eventually translate into more business opportunities for Saudis as well as overseas investors.”
RSP Architects, master planners of King Abdullah Economic City, has revised the overall masterplan of the project. Additional detailed masterplanning was provided by WATG for resorts and residential zones, SOM for the city centre and Parsons International for the Industrial Zone.
“Covering 13.8 million sq metres – a major increase of 11.2 million sq m from the earlier project - the Seaport will be the largest in the region with a capacity of over 10 million twenty-foot equivalent unit (TEU) containers per year, which is significantly higher than all other regional ports,” said Mr Alabbar. “The port will have facilities to handle cargo and dry bulk, and will be equipped to receive the world’s largest vessels. Another key component of the Port will be a custom-built Hajj Terminal.”
Following the expansion, the Industrial District will cover 40 million sq m – five times more than previously envisaged. The 4,000 hectares of land will be dedicated to industrial and light manufacturing facilities - identified as key growth drivers for the Saudi economy - and can now host 2,700 industrial tenants. The Industrial District will have specific initiatives to encourage local entrepreneurs through incubator-like modules. International experts have been consulted to ensure that the Industrial Zone development is in line with best environmental practices.
The Central Business District (CBD) will offer 3.8 million sq m of office space, hotels and mixed-use commercial space. The Financial District, within the CBD, has now been doubled in area to cover 14 hectares of land, which will be the largest regional financial nerve centre for the world’s leading banks, investment houses and insurance groups.
The retail component of KAEC takes a quantum jump following the expansion of the project. From an area of 3.3 million sq m, the total retail facilities will now spread to cover 8.7 million sq metres and house over 50,000 shops, nearly three times the earlier estimate. The retail components include shopping malls, town centers, neighbourhood malls and street shops.
The Hospitality zone will be another strategic component of the new expansion with the number of hotel rooms and suites being increased from 12,000 rooms in 60 hotels to 25,000 hotel rooms in more than 120 hotels. An ideal place to work and live, the KAEC will now have 250,000 apartments and 25,000 villas – a leap from 110,000 apartments and 16,000 villas.
The project has added 4.5 million sq m of parks and wadis that will enhance the aesthetic appeal provided by 4.9 million sq m of new water canals, which are very wide through its entire course thus creating additional waterfront. The canals are inspired by the waterways of Amsterdam and will offer 75 km of pedestrian promenade. With the introduction of the canals, more than 42 linear kilometres of waterfront has been added on to the project. Residents can thus enjoy beach boardwalks, sea water lagoons and the natural beaches fronting the Red Sea. For marine enthusiasts, the project will have five yacht clubs that can berth more than 3,000 vessels.
Building on the socio-cultural environment demanded of living environments, KAEC will have 550 mosques including several Grand Mosques in the residential zones. Several schools will be opened to cater for the educational needs of children in each community apart from a University campus for 18,000 students. A sports stadium will also be part of the project, which will have 45,000 seats.
Emaar.E.C recently set a record of sorts in the history of the Kingdom’s capital market when its initial public offering fetched an overwhelming response. With an authorized share capital of SR8,500 million, comprising 850 million shares of nominal value SR10 each, Emaar.E.C offered 30 per cent of the equity, fully subscribed by the public.
Open only for Saudi nationals, the IPO was for 255 million shares at a nominal value of SR10 each. Approximately half the country’s national population subscribed to the ten-day IPO. Oversubscribed by 2.82 times, the SR2.55 billion IPO received 2.8 million applications with the total amount subscribed at SR7.18 billion.
Work is on-schedule at KAEC. The overall project will be completed in stages, with the first batch of commercial houses and residents expected to take possession in the last quarter of 2008.