Master developers in Saudi Arabia need to create more integrated, mixed-use urban communities to satisfy the needs of aspirational consumers, Raza, the real estate management arm of Saudi Public Pension Agency (PPA) and a subsidiary of Al Ra’idah Investment Company (RIC), noted in a whitepaper on Monday.
“The pace of change in Saudi Arabia is accelerating at an unprecedented rate under the stimulus of the Vision 2030 diversification strategy. The generation of Saudi citizens coming of age now has different lifestyle, employment and leisure expectations,” the developer, a subsidiary of Al Ra’idah Investment Company (RIC), noted.
"They want communities and neighborhoods, not compound and office blocks. The real estate industry will play an essential role in that transformation, but it too has to adapt to the new environment and give citizens the experiences they want,” it added.
Read: Master developments on the rise in Saudi Arabia
In the report, Raza said it is “well placed to take the lead in this historic transformation, due to its financial resources, clear long-term vision and dedicated team of professionals”.
However, the developer said that the Kingdom's current challenge in real estate remains to deliver “A” class assets in the commercial and residential arena.
Other hubs in the region - Bahrain, Abu Dhabi and Dubai - have responded to similar challenges by moving increasingly to mixed-use developments that combine residential, commercial and hospitality facilities in high-quality constructions with good infrastructure, Raza said, citing the Dubai International Financial Centre, Downtown, and Abu Dhabi’s Yas Island as “signposts for Saudi Arabia to follow”.
“There is a lot to learn from international markets that have perhaps been ahead of us maybe by a few years. At the same time, we need to be mindful of the current cultures and customs and the local taste. Real estate at the end of the day is a local play and you cannot just replicate whatever is in a different place to where you are,” said Abdulatif Al Seif, chief executive officer of RIC.
Saudi Arabia has its own unique circumstances, and it would not be appropriate for the Kingdom’s developers to “slavishly” follow other models, the developer stated.
"But it would be beneficial for Saudi Arabia to assess what has worked elsewhere in the world and adapt as appropriate," it added.
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