(MENAFN - Arab News) The Pension Fund has announced plans to launch a giant housing project in the South Obhur, near King Abdulaziz International Airport, in Jeddah.
The project aims at providing low-cost housing facilities for the middle class and upper middle class families in the city.
The project comprises 10,000 apartments as well as different types of villas. "The project will be the biggest in the real estate business," said an official at the Pension Fund.
It would cover 2.6 million square meters of land near the airport and meet 10 percent of marketing needs for housing units in the coming 10 years, the official said.
The giant, beautifully designed project comprises 10 housing districts, of which five districts will be for residential apartments and the remaining for residential villas, the official said.
"The project is aimed at middle and upper-middle class families," the official said.
The houses will be constructed in two phases. In the first phase the organization will build apartments at 800 square meters each, while in the second phase villas would be constructed at 300 square meters.
The Pension Fund wants to build a full-fledged housing project with parking areas, commercial complexes, hospitals, hotels, health clubs, mosques, education complexes and children's parks.
"The project offers a secure investment for the Pension Fund to develop its assets," the official said.
The fund's investment company has set Aug. 13 as the last date for contractors to present their applications, the official said, adding that the project would be awarded to different contractors to complete the work quickly.
Abdulhadi Al-Rashidi, general manager of Real Estate Development Company, said the Saudi real estate market would require more than SR 500 billion in the next five years to finance housing projects.
He said the funding of projects still depended to some extent on the investor's (financial) strength and that use of debt instruments such as sukuk (Islamic bonds) had not expanded except for bigger projects.
"Since housing and development remain the focal point of both public and private sector firms during the current year, implementation of affordable housing projects have been initiated, especially for low-income categories, which have been mostly affected by price hikes over the last few years," Al-Rashidi said.
House rentals sometimes consume 50 to 60 percent of the low-income categories' annual income, he pointed out.
Saudi Arabia has allocated SR 250 billion to build 500,000 housing units within a few years.