Saudi Crown Prince launches new company to develop downtown areas in 12 cities

Saudi Downtown Company seeks to create new investment opportunities in key sectors such as retail, tourism, entertainment and housing

Saudi Downtown Company will develop over 10 million square metres of land across various projects. Bloomberg

Saudi Arabia's Crown Prince Mohammed bin Salman launched the Saudi Downtown Company (SDC) on Monday to build and develop areas in city centres and mixed-use destinations in 12 locations throughout the kingdom, the Saudi Press Agency reported.

The new company, part of the sovereign wealth fund Public Investment Fund (PIF), will work towards enhancing the infrastructure and building strategic partnerships with the private sector and investors, Spa said.

It will create new business and investment opportunities in key economic sectors such as retail, tourism, entertainment and housing.

The 12 cities are Madinah, Al Khobar, Al Ahsa, Buraidah, Najran, Jizan, Hail, Al Baha, Arar, Taif, Dumat Al Jandal and Tabuk.

“SDC will develop over 10 million square metres of land across all projects, creating modern destinations drawn from Saudi Arabia’s diverse local culture and traditional architectural motifs, while using cutting-edge technology in every project,” Spa said.

Saudi Arabia, the world’s top oil exporter, has recorded strong economic growth this year on higher oil prices after its recovery from the impact of the coronavirus-induced slowdown in 2021.

Its economy grew by 12.2 per cent in the second quarter, exceeding initial estimates and registering the fastest expansion in more than a decade, according to the kingdom’s General Authority for Statistics.

It is expected to expand 7.6 per cent this year after growing by 3.2 per cent in 2021, the International Monetary Fund said in its World Economic Outlook update in July.

The kingdom could be one of the world’s fastest-growing economies this year, the IMF said in August.

The PIF lies at the centre of the kingdom's Vision 2030 plan to diversify the Arab world's largest economy and reduce its reliance on oil.

Under a five-year strategy announced last year, the PIF aims to more than double the value of its assets under management to $1.07 trillion and to commit $40 billion annually to develop Saudi Arabia's economy until 2025.

It has created 10 new sectors, set up more than 30 new companies, created 331,000 jobs in Saudi Arabia and more than tripled its assets in the past few years. Under its five-year plan, it will focus on 13 sectors as part of its core domestic strategy.

Through SDC, the sovereign wealth fund aims to boost trade and investment opportunities in various cities across the kingdom that will enhance their local economies.

“The projects will also contribute to creating new opportunities for the private sector and new job opportunities for local citizens, as well as localising knowledge and expertise to help entrepreneurs and companies start and expand their businesses,” Spa said.

The company’s strategy aligns with PIF’s efforts to unlock and enable the capabilities of promising sectors locally that can help drive the diversification of the economy and contribute to non-oil gross domestic product growth, it said.