Gulf Construction Online - Neom secures $5.6bn residential investments

Saudi Focus

Officials after finalising the contractors for the expansion of residential communities.

Neom secures $5.6bn residential investments

01 July 2023

Neom has announced that it has finalised contracts with investors for the first phase of its residential communities’ expansion, a social infrastructure project that will house the region’s growing workforce.

The agreement amounts to a total value of over SR21 billion ($5.6 billion), making it one of the largest international public-private partnerships for accommodation, the developer said.

The preferred bidders for the first phase of the residential communities consist of leading Saudi Arabian companies, Alfanar Global Development, Almutlaq Real Estate Investment Company (AREIC), Nesma Holding Co, and Tamasuk, which are involved via two separate partners: Al Majal Al Arabi Group Company and the Saudi Arabian Trading and Construction Company (Satco).

Nadhmi Al-Nasr, Chief Executive Officer, said: “Neom has selected some of the leading companies in Saudi Arabia as partners in delivering and operating temporary communities with world-leading services and infrastructure. The newly formed partnerships mark an important milestone and is a testament to the capabilities of our team and partners who rapidly achieved financial close on a record amount.”

The agreement paves the way for more private sector participation in the development of Neom’s infrastructure. The second phase of the temporary residential project is expected to be floated on the market in the coming months. In addition to contract awards, Neom is reviewing interest from investors with plans to shortlist pre-qualified participants from now.

This latest public-private partnership is a vital step in bringing larger plans online to their agreed timescales. The scope for this agreement will cover elements of design, finance, build, operations, and maintenance of the housing communities.

Alfanar Projects (formerly Alfanar Vonstruction) has announced plans to pump in SR10 billion (for the development of five residential communities coming up over a 4 million sq m area at Neom.

The agreement will see an additional 10 communities established across Neom, adding capacity for 95,000 more occupants once the first phase is completed. The temporary accommodations, needed during the construction period of Neom, are built sustainably as relocatable modular units which can be repurposed once the communities are no longer needed.

In addition to essential services, the communities will include lifestyle facilities, such as sports fields, cricket ovals, tennis courts, volleyball and basketball courts, swimming pools and entertainment venues.