Jeddah has long been seen as the principal gateway to Makkah and Madinah, two of the holiest cities in Islam. It is also the commercial capital of Saudi Arabia owing to its geographical location on the coast of the Red Sea.
With a total population of 4.3 million recorded in 2017, Jeddah is the second largest city in Saudi Arabia. It plays a crucial role in the government’s diversification plans, owing to its roots in shipping and trade, but also due to it being the primary point of transition for millions of pilgrims who travel each year to perform Hajj or Umrah.
The decision to lift the 20% reduction of Hajj quotas at the beginning of 2017 led to King Abdulaziz International Airport in Jeddah welcoming 34 million passengers by the end of that year, a 9.4% increase from the levels recorded in 2016.
Major infrastructure projects are currently underway in the Western region of Jeddah. The largest project announced to date is the Red Sea Tourism Project, which encompasses a total area of 34,000 sq km spread across 50 islands. Jeddah Tower, set to be the world’s tallest building at 1,000 meters, is also under construction in the city’s Economic City region.
There are significant structural changes being introduced within the city, including the injection of approximately SAR 18 billion by the Public Investment Fund (PIF) for the re-development of the Corniche front.
This will position Jeddah’s waterfront area as the primary downtown destination and will provide visitors with a wide range of attractions, such as retail outlets, restaurants, museums and sports activities.
The mismatch between (over) supply and demand in the residential sector in Jeddah means there will be a downward pressure on residential performance, highlighting the need for affordability and differentiation.