MAGAZINE: The magic kingdom of Saudi Arabia

For anyone travelling to Saudi Arabia, the chances are it won’t be long before a strong impression is made - the expanse of desert as far as the eye can see, beginning with most roads leading away from King Khalid International Airport, with the exception of those going south to the busy capital, Riyadh.

Heading north along Airport Road, King Fahd Road, and the Riyadh - Al Qassim highway one sees single hotel developments, homes in high walled compounds, numerous square box buildings of sand colour, dark and concrete grey…and lots of land.

To get around, the car is the pre-eminent way, with Hyundai Elantras, Toyota Camrys, Land Cruisers, GMCs, and the more recent favourite, Land Rovers, among the bestsellers.

But there is still no clue as to what is taking place here in the Kingdom of Saudi Arabia (KSA), except for several road-side banners advertising and pointing the way to Cityscape Global, an event being held in Saudi Arabia for the first time.

Saudi Arabia is currently a global hot spot – arguably THE global epicentre - for gargantuan developments. What used to be talked of a few years ago as ‘mega projects’ are now referred to as ‘giga-projects’. These super large-scale developments are spread around major cities such as Riyadh, Mecca, and Jeddah, along the touristy Red Sea, and are sometimes touted as brand new ‘cities’, such as Neom’s most famous project, The Line.

Tourism destinations are a big part of the Vision, examples being Neom’s 36 km adventure resort, Trojena, up in the Neom mountains near the border with Jordan, and AlUla also in the north-west described as ‘crossroads of civilisations’ connecting Asia, Africa and Europe based on the old trade routes of spices, cotton, ebony and silk.

There are so many projects proceeding now that it is hard to keep up, with multiple contracts being signed for construction and supplies.

Live case study
Saudi Arabia has turned into a fascinating live case study on how a relatively wealthy country (it is ranked 24th in the world) can develop under the energy of a youthful Crown Prince and Prime Minister Mohammed bin Salman, seventh son of King Salman, via a nationally adopted roadmap.

Vision 2030 seems to have universal domestic support – though in a country where openly criticising the government is not tolerated much. The plan is to diversify the nation’s economy away from oil into many other things. Those things include what it calls a vibrant society, an investment powerhouse, a global hub, a thriving economy, the development of its sovereign wealth fund Public Investment Fund (PIF) into the largest in the world, a stronger financial sector, healthcare transformation, tourism to compete with Dubai and Abu Dhabi and boosted by its two holy mosques, greater job opportunities, cultural entertainment, sport, technology, sustainability, developing its own weapons and machinery for military needs, and very integral to it all - a lot of new housing, mixed-use and commercial property.

The whole effort was launched in April 2016. Seven years on, and the plan to fulfil millions and millions of square metres of development is made all the more intriguing given Saudi Arabia’s unique heritage and culture, its hot climate, topography, considerable scepticism from abroad, and attacks on Saudi Arabia over its human rights record.

On the one hand, KSA continues to attract criticism for alleged human rights failures, the treatment of foreign workers, plus scepticism of grandiose announcements of huge developments. Occasionally, international articles have appeared such as one in the Los Angeles Times in January which began by talking about the 826 ft tall ‘spaceship’ Jeddah Tower and linked business and innovation district which six years after it was meant to be finished is still not open. The LA Times said it was a relic of a previous plan launched in 2008 meant to rival Dubai’s Burj Khalifa. But it seems this might have been superseded by newer plans for Jeddah under the Crown Prince. The delayed Riyadh Metro is another example giving possible ammunition to detractors.

On the other hand, there are signs of the nation being more permissive towards society. Since 2018, women have been allowed to drive. Women can work in most industries, and have been able to travel abroad since 2019, and register for divorce or marriage. The country is opening up to live music, is allowing more movie theatres and festivals, and is building its first-ever opera house at Jeddah. In October this year, The Phantom of the Opera made its debut in Riyadh at the Arena Venue for Exhibitions.

This aside, even hardened sceptics must concede some of the first phases of giga-projects are being completed and handed over to end-users, with more slated to be finished soon. Roshn, the newest of the giga-project developers, began handing over keys to villas and townhouses at Phase 1 of Sedra in northern Riyadh in November 2022. When fully completed, Sedra will add 30,000 homes to the housing stock and provide 20 million m2 of integrated neighbourhoods with education, healthcare, infrastructure, retail, restaurants, parks, footpaths, and cycle tracks.

Technology and ESG have come to the fore in the Kingdom. Luxury electric car company, Lucid, which is 60.5% owned by PIF, officially opened its first-ever car manufacturing facility in Saudi Arabia in September at the King Abdullah Economic City in Jeddah. In October, PIF said it had partnered with Saudi Electric Company (SEC) to launch an electric vehicle infrastructure company.

Infrastructure projects
Public Private Partnerships (PPPs) are being encouraged and international banking is coming into infrastructure projects. For example, in 2021 it was announced that the Saudi British Bank (SABB) acted as one of the mandated lead arrangers of the SR 14.12 bn (€3.56 bn) Red Sea project, while its affiliate, HSBC, was green loan co-ordinator. This was the first ever Saudi riyal-denominated LMA Green Loan Principles-compliant green loan in the country.

In an article by HSBC in July entitled ‘From desert dreams to today’s reality’, the global bank tells the story of how planned large-scale infrastructure projects are now getting off the ground.

‘As the biggest economy in the Gulf Cooperation Council (GCC), Saudi Arabia has always been important. But in the export finance world, the regional focus has been mainly on Egypt and the UAE, rather than on the Kingdom. Now a number of factors are coming together that are bringing Saudi Arabia front-of-mind for investors and contractors.’

Manav Futnani, MD and global co-head of export finance at HSBC, explained: ‘What’s changing at the moment is the scale of what is being developed and built in Saudi Arabia. It’s so enormous, I would argue unprecedented, that there is going to be an opportunity and a requirement for projects to look outside for alternate sources of financing.’

The bank continued: ‘These projects cover tourism, residential, commercial, and industrial projects with an emphasis on green and sustainable development. A number of them are directly owned by the country’s sovereign wealth fund, the Public Investment Fund (PIF), which has more than $600 bn in assets, and others are owned and funded by the government through public entities.’

Project showcase
Cityscape Global, held in Riyadh in September, was a glorious chance for the Kingdom to host an important real estate show. All the giga-projects and other developments across the entire country were showcased under one roof for everyone to see. It was the first time the GCC-based event had ever been held in Saudi Arabia in the 21 years since the inaugural edition held in Dubai.

Some UK brands were exhibiting such as Savills and Knight Frank as they looked to entice Saudi investors and others to invest in UK residential developments in London, Manchester, and other UK cities. There were exhibitors from a myriad of countries such as Egypt, Turkey, Qatar, Georgia, the US, and many others.

But the main thrust was the fantastical exhibits of Saudi giga-projects, which have become household names in the Kingdom. They are Neom, the Red Sea Project, Qiddiya Project, Roshn, and the Diriyah Company, all backed by PIF.

To give an idea of the sheer scale of these giga-projects, take Neom. Its projects cover 26,500 km2 of the Red Sea coast – that’s greater than the size of Israel, Kuwait, Fiji, or Slovenia, and are expected to cost around $500 bn (€473 bn). Among Neom developments are Oxagon, Trojena, Sindalah, and The Line, the latter being a revolutionary, futuristic-looking project.

Launched in 2021, construction of The Line has already begun. Its remarkable feature is its 170 km length, 500m height but just 200m width like a corridor of communities that promises to be free of cars and where nature and facilities are always a five-minute walk away. The Line could take 50 years to complete whereupon a planned nine million people – about the population of New York City, Wuhan, or London - will live in 13 square miles in the desert. The carbon footprint of The Line urban development project is 2% of a conventional city, with zero emissions and 100% use of renewable energy, wind, solar and hydrogen.

Some Saudi projects are quite standard in their design and approach. But The Line, designed by LA architectural firm Morphosis, is certainly not one of them. In an example of how far Neom is prepared to push the envelope, it hired a French artist to go ahead with his design for a showpiece element of The Line’s impressive marina. A dramatic, giant ‘chandelier’ will hang from a 300-metre high ‘gap’ in The Line that allows cruise ships to pass through from one side to the other of its marina.

Olivier Pron, the artist behind this ‘chandelier’, was to be found at the Neom stand at Cityscape. He said: ‘Neom wanted to truly have a vision that is not constrained by any architectural aspect.’ His idea won a competition, and he is now commissioned to get it done.

During Cityscape, Saudi Arabia’s National Housing Company alone announced an initiative to build SR 42 bn (€10.6 bn) of real estate in the residential areas that fall under its remit. But across the Kingdom, developers and public bodies are planning all sorts of housing, offices, science-led space, educational, retail, logistics, hotel, leisure, mixed use, sports, and recreation. One of the most prominent leisure developments is Sports Boulevard in Riyadh, made up of eight districts each promoting a healthy lifestyle and boasting what is claimed will be the world’s largest ‘linear park’ at 135 km connecting east to west, with 2.3 million m2 of investment areas, 50 sports facilities, and 4.4. million m2 of green and open spaces.

Urban greenery
Trees and shrubs are talked about everywhere you go when meeting Saudi development companies. In October, the country launched an initiative to grow 10 billion trees for cities, highways, and green belts. In cities, this could reduce temperatures by at least 2.2 degrees Celsius, it is claimed. By 2020, over 600 million trees are expected to be planted. Meanwhile, Riyadh city has launched the Riyadh Green Program to introduce 48 major parks, 3,250 parks in residential neighbourhoods, and a first phase of 31,000 trees along 144 km of main roads including Airport Road and King Salman Road.

Farms are also talked about. Madr Investment Company, which claims to be the largest real estate investment company in Saudia Arabia in terms of capital investment, is not owned by PIF but rather a family business. It presented more than half a dozen projects at Cityscape Global, one translating as ‘The Roses’.

A spokesperson said: ‘The whole project is based around an existing natural river. The main idea is to make it like a small city inside a city where it is healthy and where you know who your neighbour is. We have a health centre, a swimming pool, playgrounds, and all these villas have a farm outside the house.’

No one is likely to seriously criticise ambitions by Saudi Arabia to encourage healthier, non-car-dominant lifestyles. But some projects certainly attract scepticism as well as wonder. None more so than The Line, which to some looks like a dystopian nightmare development where no-one will actually want to live.

Juan Carlos Baumgartner, founder and CEO of Space Architecture, was born in Mexico City. He was among many speakers at Cityscape Global and is an expert on the brain. Some of his previous talks are entitled ‘NeuroArchitecture’ and ‘Design for Happiness’.

He is worried about urban and city developments and giga-projects around the world – let alone Saudi Arabia – for their potential negative impact on people.

‘I see many of the projects that are being signed and are going to be built. I am really scared because many of the things that they're signing off on are really bad for humans if you see it from a cognitive perspective,’ he said.

He argues that architects are going to take a while to catch up with new knowledge of neuroscience.

‘Architects are really bad at listening to people. What we think is good for humans is a social construct. It turns out we have three pains that come from the same mechanism as physical pain. Your brain doesn’t recognise you are suffering because of lack of aesthetics, and aesthetics is not the same as beauty.

‘Aesthetics has a lot to do with where you come from and the period of time you live in. What I am seeing here is a lot of things that are not aesthetic. In the end, what we are going to be doing with many of these things is torturing people. We have been doing it for many years in many countries.’

One example of pain is predictability. ‘If you can predict very easily what you are seeing that is going to be very boring for you. Boredom is one of the things that triggers the pain mechanism. If your brain does not have to figure out how things work, it won’t produce dopamine.’

Young population
It’s an interesting point. Liveability is not just about the best housing. It is what it actually means for people living in that city or location. But as it happens, Saudi Arabia might just have a secret weapon going for it. The country has a very young population. Some 63% of its 32 million citizens are under 30. Around 37% are under the age of 14. This generation has grown up with apps and other technology running key aspects of life, so might be better psychologically equipped to deal with new smart city developments coming to fruition than previous generations.

There is a trend of Saudi youth returning from abroad after perhaps studies there who want more western-style open approaches. Many are returning to the Kingdom having initially left to find better work opportunities abroad.

Musab Almardhi is an example. The young Saudi executive media producer at a company called Charisma Productions left his country for Dubai and stayed for seven years. Now he is back.

‘A lot of people of my generation moved to Dubai because there were not so many opportunities in Saudi when it came to TV production at the highest level. But the Crown Prince was a gamechanger for TV and multimedia production,’ he says.

‘The opportunities here are now better than anywhere else. Let’s say it is the opposite wave now. It used to be that Saudi people would leave for Dubai for TV production, but now it is the other way around.’

Underlining local interest, local Saudi people, sometimes whole families, flocked through the doors of Cityscape Global after work hours to peruse the new housing projects on offer.

But for city developments to work, clearly employment, education, health, and security are going to be as important as the quality of housing.

The nation also wants to keep things as local as possible when it comes to employment and sourcing of goods and services needed for its projects.

Jerry Inzerillo is group CEO of Diriyah Gate Development Authority (DGDA), a $63 bn project covering 7 km2. This project is culturally very sensitive because it is the centre of the birthplace of the first Saudi state at At-Turaif, a UNESCO World Heritage Site. Being just 20 minutes north-west of Riyadh, it is looking to attract 25 million visitors.

Inzerillo says: ‘We are making the birthplace of the Kingdom one of the great capitals of the world, but we are doing it by taking local talent. When we started, we said we were only going to do it if our community benefitted. There are a lot of giga-projects around the world where the development doesn’t take the community with them. As a matter of fact, the community sacrifices with all the disruption; but not us. We have staff approaching 2,000 - 85% are Saudi and 36% Saudi women of whom 16% are management on full KPIs. But 14% of staff are from Diriyah, from our community.

‘And we have a very strict company policy – we do not use any resource until we have extinguished resources from Diriyah. We buy everything from our community. When we can’t, we go to Riyadh, and when we can’t do that, we go to the Kingdom, and when we can’t do that, we go to the Gulf.’