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Driving Madinah’s economic development

14 February 2024

 

The Rua Al Madinah project is a transformative development located next to the Prophet’s Mosque in Madinah, the second holiest site in Islam.

Saudi Arabia’s Crown Prince Mohammed Bin Salman announced the infrastructure works and the masterplan for the project in August 2022. It aims to enhance the experience of the millions of visitors who travel to the holy city each year. 

Spearheading the development is Rua Al Madinah Holding, which is a subsidiary of the Public Investment Fund (PIF). Its mandate is to develop modern real estate projects in the holy city with goals aligned with the broader objectives of Vision 2030. 

The project is central to the kingdom’s plans to expand its tourism and hospitality sectors. The urban development is designed to integrate the heritage of Madinah with state-of-the-art facilities. Covering an area of 1.5 million square metres, it is expected to contribute SR140bn ($37bn) to Saudi Arabia’s GDP, creating 93,000 jobs.

Visits increase

“Madinah currently attracts millions of visitors annually, primarily due to its religious significance, centred around the Prophet’s Mosque,” says Rua Al Madinah Holding Company CEO Ahmed Al Juhani. “More than 13.5 million Muslims performed Umrah in 2023 – the highest number of international pilgrims the kingdom has welcomed, as per the country’s Minister of Hajj and Umrah Tawfiq Al Rabiah.

Connect with Rua Al Madinah using this LINK

“With Vision 2030 projects like Rua Al Madinah, the city is poised for significant hospitality growth. These initiatives aim to improve infrastructure and services to accommodate an expected increase in visitors, particularly for Umrah, projected to reach 30 million annually by 2030,” says Al Juhani. 

“This growth presents both an opportunity for economic development and a challenge in sustainably managing the influx while preserving Madinah’s cultural and religious heritage,” he adds.

With Vision 2030 projects such as Rua Al Madinah, the city is poised for significant hospitality growth
Ahmed Al Juhani, CEO of Rua Al Madinah Holding Company

Innovative solutions 

Rua Al Madinah is meeting the holy city’s infrastructure and real estate requirements with cutting-edge solutions.

“The focus lies in modern urban planning and the execution of diverse, comprehensive projects to enhance Madinah’s stature as a destination with a contemporary architectural landscape,” says Al Juhani.

“Rua Al Madinah Holding is leading the development of modern infrastructure and is working on current and future projects to develop a hotel and commercial ecosystem,” he says.

The projects’ objectives are aligned with Saudi Arabia’s Vision 2030 goals, which include increasing the number of tourists visiting the kingdom and creating job opportunities.

“The company seeks to advance Madinah’s hospitality and real estate investment sectors to enhance services for visitors while fostering sustainable green environments and a modern lifestyle for residents,” says Al Juhani. “The company also strives to drive economic development in Madinah, providing tens of thousands of job opportunities for local residents.”

While offering best-in-class modern buildings and infrastructure, the “Rua Al Madinah project complements prior efforts and projects”, says Al Juhani.

“By aligning with Vision 2030, it integrates modernised designs that honour Madinah’s heritage, prioritises sustainability and deploys advanced smart city technologies.”

Work is already well advanced, and so far, there have been SR8bn ($2.1bn) of contract awards on the project that include, but are not limited to, construction contracts.

By early 2024, 25% of the infrastructure work had been completed. Key highlights include the Al Amidah Road project, which has transformed the secondary route into a major thoroughfare with a width exceeding 35 metres.

Another major construction effort was the tunnel at Ali Bin Abi Talib Road, which is now completed, making it the first tunnel to be finished as part of the Rua Al Madinah project. 

Investment opportunities

Looking ahead, Al Juhani says that the delivery strategy for the Rua Al Madinah project portfolio is split into phases with the aim of delivering around 47,000 keys up to 2030 progressively.

“The phasing and packaging strategy has considered multiple factors, including asset class, star rating, package value and site logistics, aiming to expand the pool of supply chain to include consultants and contractors from multiple tiers and subsequently support Rua Al Madinah’s strategic objective to create economic opportunities to drive Madinah’s growth and diversification,” he says.

There is a broad range of investment and business opportunities on the project, and Al Juhani says the city is a major economic centre and an attractive place for companies to work.

“Madinah features a sophisticated supply chain and excellent connectivity. Its strategic location and infrastructure, including advanced logistics, cater to fluctuating demands, particularly during peak seasons like Hajj and Umrah,” he says.

“The city is well-connected to key Saudi economic centres like Jeddah and Riyadh, thanks to its extensive road networks, Haramain high-speed railway and international airport. This combination of a flexible supply chain and robust transportation network positions Madinah as a vital economic hub in the kingdom.”

For investors, the project has also proven to be attractive. “We have forged strategic agreements with globally renowned operators such as Marriott International, Hyatt International and Accor Group. Such agreements are set to introduce 14 distinguished international brands to the project,” says Al Juhani.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11515581/main.gif
Colin Foreman

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