The development of cinemas, along with cultural and artistic centres in Saudi Arabia will boost opportunities for real estate developers in Jeddah, a new report has found.
The report by property consultancy JLL stated that the expansion of Jeddah’s entertainment sector will benefit the retail and hospitality sectors in the long term.
“Projects [such as the Jeddah Opera House] are aimed at diversifying Jeddah’s visitor base, which is expected to see a growing mix of corporate, leisure, local and gradually international visitors, creating further demand for hotels in the market,” JLL said.
In February, the kingdom’s General Entertainment Authority (GEA) announced that Saudi’s first opera house would be opened in Jeddah.
The GEA also said at the time a budget of $64bn had been allocated towards the entertainment sector for the next 10 years.
The push into the entertainment sector is part of Saudi’s ambitious Vision 2030, which seeks to diversify the kingdom’s economy away from oil.
Saudi Arabia lifted a 35-year ban on cinemas late last year, with plans for regional and global chains to open more than 300 movie theaters by 2030.
The expansion of the entertainment sector directly impacts the retail sector, with the first permanent cinema to be housed in the Red Sea Mall in Jeddah, the report stated. Vox Cinemas will be investing in the mall, with operations set to commence in Q1 2019.
The retail sector will also benefit from a number of new cinemas resulting from the agreement signed earlier this year between Vue Cinemas and Al Hokair Holding Group, it added.
In May, it was also announced that Saudi Arabia’s main sovereign wealth fund, Public Investment Fund (PIF), will set up a network of entertainment centres across the kingdom.
Abdullah al-Dawood, chairman of Development and Investment Entertainment Company (DIEC) – established in January by the PIF – told Reuters his firm envisaged about 20 centres, each around 540,000 to 1.1 million sq feet, in 14 or 15 cities.
DIEC will invite private companies to invest alongside it on a commercial basis, Dawood said.
“The announcement of the Jeddah Opera House, and the subsequent development of cinemas and cultural centres will introduce further investment opportunities for international and local companies, looking to move into new sectors,” said Craig Plumb, head of Research, MENA at JLL.
“The kingdom is now in its implementation phase of the Saudi Vision 2030, which aims to diversify the economy from oil dependency, by increasingly investing into the tourism and other sectors.
“Developments in the entertainment, art and cultural sector will improve the sentiment across all categories of the real estate market,” he added.