PPPs set to help accelerate housing projects and address rising demand

PPPs set to help accelerate housing projects and address rising demand

Experts from the real estate sector discuss future prospects of addressing housing demand in the Kingdom. — Photo by Layan Damanhouri

Layan Damanhouri
Saudi Gazette

The ministry of housing has taken measures to shift away from playing the role of developer to working with the private sector in developing projects through new decision-making processes and public-private partnerships, a positive step in addressing the housing crisis. This was disclosed in the Housing session on the second day of the Jeddah Economic Forum.

The direction should be “to move into a full partnership to build communities, not just match-box buildings”, according to CEO of Kinan, Nedal Jamjoom.

In light of the recent ministry’s announcement of constructing 56,000 units in partnership with 11 developers, officials discussed the new strategic plan and future prospects for the Kingdom that has witnessed a rapidly growing population of youth.

The ministry cannot cope in filling up the demand gap in the Saudi market, said chairman and CEO of BMG Financial Group Basil Ghalayini. “Therefore development companies have to play their own role in filling the gap and getting all the support from the government as well.”

Turkish senior advisor to AkrarOne Company Alper Apaydin, who participated in the discussion, offered Turkey’s success story in building 3 million housing units for all sectors of a young population from low-income to high-income families through PPPs.

“PPPs was crucial especially after the global crisis in real estate industry. We had a public company mixed with private entity corporations,” he said, adding that the most important factor in PPPs is trust that will enable efficiency and faster speed of execution.

Ayman Mansi, director of residential development at King Abdullah Economic City, said the Kingdom needs to double its efforts from building 150,000 units to 300,000 housing units annually. Increasing speed of approvals, faster executions by international and local developers, and innovation in product and regulation are strategic initiatives to accelerate PPPs.

Speaking to Saudi Gazette, Mansi said there is a big effort in the Kingdom to attract foreign investments. “One key area is to come up with an initiative to facilitate the early entrance of these foreign investors in the approvals. I think they see the potential of the Saudi market and the demand. The beginning is the toughest part which is securing the licensing and the labor.”

Going the extra mile and sharing the master plans of developments with the government in the early stages, he says, is one of the reasons infrastructure projects at KAEC have accelerated and have been completed in nine months unlike other developments that typically take three to five years to complete.

When asked when people are advised to buy a house, CEO of SEDCO Development Zuhair Hamzah, suggested all the time is the right time, adding that the waiting time in the coming years is immeasurable.