Saudi signs $3.9bn of housing deals with Chinese firms

Saudi Arabia’s Ministry of Housing has signed $3.9bn of deals with Chinese firms to build more than 26,650 homes in the kingdom.

The plans come as the kingdom increasingly relies on private sector partners to build housing projects through an arrangement where it provides financing but developers bear the risk, having previously handled construction solely through government departments.

Read: Saudi ministry implements first private sector housing project

Under the first $2.7bn deal, a Power China International Group Limited-led consortium will build the first phase of the Dhahiat Al-Asfar master plan.

The ‘yellow suburb’ will cover 10 million square metres of Ministry of Housing land in Al-Ahsa governorate and includes 17,000 homes to be completed over six years.

Power China International Group Limited representative Wenhao Wu said the project would address demand for housing and create nearly 4,000 jobs for Saudis.

The second $1.2bn agreement will see Sani China and local partner Amreya Real Estate Investment Company build 9,658 residential units in Jeddah and Dammam.

The homes will come under three residential projects with the first, ‘Sunset Hills’ in Jeddah’s Prince Fawaz neighbourhood, spanning 6,512 housing units. Two other projects in Dammam will span 1,632 villas and 1,514 apartments respectively.

The first phase of the deal is expected to be completed in 2020.

The two companies will also establish factories in Jeddah and Dammam and other facilities for construction equipment to meet the needs of the local market.

The kingdom indicated in 2017 it planned to deliver one million homes over the next five years.

Read: Saudi plans to deliver one million housing units over next five years

The deals were signed at the Future Investment Initiative, the kingdom’s most prominent conference for foreign investors.

Officials said $56bn of deals were agreed during the event despite controversy in the build-up linked to the killing of journalist Jamal Khashoggi in the kingdom’s Istanbul consulate.

Read: Saudi conference ends with $56bn of deals amid partial boycott

The CEOs of several western firms pulled out of the event in the days and weeks before citing concerns over Khashoggi’s death.