PROPERTY NEWS

Saudi Arabia is to allow foreign real estate investors to own property for the first time in one of four cities under construction in the country.

King Abdullah Economic City will be the first freehold city in Saudi Arabia and is being built by government controlled Emaar Economic City at a cost of $27bn with an expected completion date of 2025. It will cover an area the size of Brussels, according to a report from Propertywire.

Emaar Economic City Chief Executive Officer, Fahd Al-Rasheed said, "A lot of people want to invest in the Saudi market and see it as a frontier for real estate investment because of the population explosion here."

The city, known as KAEC, is near Jeddah and designed to house two million people and generate a million jobs. The other three cities under construction are Knowledge Economic City in Medina, Jazan Economic City in Jazan and Prince Abdul Aziz bin Mousaed Economic city in Hail. Two more economic cities are planned in Tabuk and the Eastern Province.

KAEC is part of a $400bn plan announced by the government in 2008 to invest in Saudi Arabia‘s infrastructure and make the country less dependent on the oil industry as well as meet its population growth. Saudi Arabia‘s population has more than doubled since 1986 to about 25.5 million.

Foreign investors, individuals and companies, will be able to buy under the new Economic Cities Act issued almost two months.

Regulations putting the act into effect are expected soon and will cover issues such as foreclosures, repossessions and the creation of a land registry.

KAEC will have the Red Sea‘s biggest port and an industrial district where French oil company Total SA and United States chocolate maker Mars will operate. The city will be spread over 65 square miles.

"Over the next five years we expect to spend more than $4bn developing infrastructure and assets in the city. This won‘t be done by us alone, but with other partners," Al-Rasheed said.