The planned 140,000 square metre financial district within Saudi Arabia’s massive King Abdullah Economic City (KAEC) development has been put on hold due to concerns it would not be competitive.
The area within KAEC’s Central Business District (CBD) was planned to become the largest financial centre in the region, attracting leading banks, investment companies and insurance groups.
Instead development is focussed on other industries for now, according to Fahd Al Rasheed, MD and CEO of KAEC.
“Financial we’ve put on hold for now because we believe it is not a sector that we can be competitive in. That’s why today, in addition to industry and logistics, we focus on hospitality, healthcare and education.
At the Arabian Hotel Investment Conference this week the King Abdullah Economic City company turned its focus to the hospitality industry with plans to build 10 hotels, totalling 2,000 rooms, over the next six years.
The first of these is set to be the four-star Bay La Sun Hotel and Marina, consisting of 195 rooms and suites.
Al Rasheed described the hotel industry as “critical” to the development’s success.
“Cities need to attract the best of talent the best of people and that means you have to offer lots of entertainment lots of hospitality, lots of infrastructure related to human beings.”
“Plus as a job creator it is very important as well,” he added.
When questioned whether Saudi Arabia would need to reduce its visa restrictions to become a successful tourist destination, Al Rasheed said it was important for the country to focus on its niche, with Haj and Umrah pilgrims and “huge” untapped local tourism potential.
The zone, which is nine years in development, saw the opening of the first phase of its 14 square kilometre seaport, which started operations in January and is planned to be one of the top shipping destinations in the region.
“You have 25 per cent of global trade going through the Red Sea, so we believe that if you address that market with the proper marine infrastructure and processes then we can actually grow it,” said Al Rasheed.
He also confirmed that foreign individuals would be able to own property within KAEC.
“That has been approved but the by-laws of the execution are still under development, we expect them to be issued very soon,” he said.