Saudi special economic zone plot sold for $98m

Reuters/Stephen Kalin

• Emaar The Economic City makes land deal with group of companies
• Zone’s benefits include exemption from customs duties on imports
• Focus includes logistics, car assembly, consumer goods and medtech

The master developer of King Abdullah Economic City has announced a land sale worth SAR367 million ($98 million) as Saudi Arabia presses on with plans to create further economic zones in the kingdom.

Emaar The Economic City, which is listed on Tadawul, said in a filing to the Saudi stock exchange that it has sold the plot to a group of companies.

Dar Al Himmah Projects Co Ltd, Zamil Group Real Estate Company, Abdullah Ibrahim Alkhorayef Sons Co and an unnamed subsidiary of the Public Investment Fund will use the land to develop infrastructure and create an industrial logistics hub in the King Abdullah Economic City (KAEC) special economic zone, according to the filing.

• Saudi economic zones attract initial $13bn investments
• Saudi launches 4 economic zones to attract global firms
• Saudi reforms aim to attract $3.79 trillion in investment by 2030

KAEC is one of four special economic zones which were launched in April by Saudi Crown Prince Mohammed bin Salman. 

The zones, which also include Ras Al-Khair, Jazan and Cloud Computing, offer competitive corporate tax rates, exemption from customs duties on imports, production, machinery and raw materials, and 100 percent foreign ownership.

KAEC is situated on the Saudi coast of the Red Sea, a short distance north of the commercial capital Jeddah.

The 185 sq km city is anchored by King Abdullah Port and KAEC Industrial Valley.

Officials revealed in May that the zones have already attracted $13 billion from investors, with discussions under way for another $31 billion.

Investments so far in the four zones cover the maritime, mining, manufacturing and logistics and technology sectors.

Latest figures from the General Authority for Statistics show Saudi Arabia’s Industrial Production Index increased by 3.2 percent in April compared to a year earlier – boosted by a 10.5 percent jump in manufacturing activity.

At the April unveiling the Crown Prince said they would create thousands of jobs and contribute billions to the country’s economy.

Last year Saudi Arabia also set up an agency to attract more foreign investment. The Saudi Investment Promotion Authority’s work is a key part of the Vision 2030 plan to transform the oil exporter’s economy and reduce reliance on hydrocarbon revenues.

The kingdom’s National Investment Strategy seeks to attract more than $3 trillion in investment into the domestic economy by 2030 and aims to bring in more than $100 billion in foreign direct investment annually by the turn of the decade.