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A RESTRUCTURED KING
ABDULLAH FINANCIAL
DISTRICT
In the last decade, works started at the King Abdullah
Financial District, without consideration of its economic
feasibility. The objective was to prepare the land in
order to allow the business and financial communities
to invest and build real estate. When this objective was
not reached, the government decided back then to
develop and rent the real estate. Challenges were
deepened by the development of the real estate project
in one single phase, which caused a significant increase
in construction costs and several delays in delivery. This
resulted in large oversupply of commercial space for
the years to come. Without any dramatic shift in
direction, renting the three million square meters of
built-up areas at reasonable prices, or even achieving
decent occupancy ravtes, will be very challenging.
With this in mind, we have reviewed the economic
feasibility of and designed a new fundamental strategy
for the district in order to increase the chances of
profitability and success. We will seek to transform the
district into a special zone that has competitive
regulations and procedures, with visa exemptions, and
directly connected to the King Khaled International
Airport.
We will also seek to repurpose some of the built-up
areas and change the real estate mix, increasing the
allocation for residential accommodation, services and
hospitality areas. We will seek to build and create an
integrated and attractive living and working
environment. The district will be the headquarters of
the Public Investment Fund, the largest sovereign
wealth fund, which will contribute to creating an
environment attractive to financial, investment and
other corporations.
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