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Summary Of The Case Studies
Background: A foreign investor from the UK wants to develop a mixed-use project in Riyadh, the capital city of Saudi Arabia, as part of the Riyadh Development Authority’s (RDA) plan to transform the city into a global hub for business, culture, and entertainment. The investor has expertise and experience in developing large-scale projects that combine residential, commercial, retail, hospitality, and leisure components. The investor wants to take advantage of the growing demand for urban living and lifestyle options in Riyadh, as well as the incentives and support offered by the RDA for this sector.
Objective: The investor needs to obtain a land plot, design and construct the project, market and sell the units, and operate and maintain the facilities.
Process: The investor follows these steps to develop the project:
- Apply for a land plot from the RDA. The RDA is the authority that oversees and regulates urban development in Riyadh. The investor needs to submit an online application through the RDA’s website, providing information about the project, its location, its size, its components, its design, its budget, its timeline, and its expected economic and social impact. The investor also needs to provide supporting documents, such as a feasibility study, a master plan, a concept design, a financial statement, a certificate of incorporation, a passport copy, and a bank statement. The application fee is SAR 10,000 (USD 2,667). The RDA will review the application and allocate a land plot within 30 working days if all requirements are met.
- Obtain a building permit from the Ministry of Municipal and Rural Affairs (MOMRA). MOMRA is the authority that issues and regulates building permits in Saudi Arabia. The investor needs to submit an online application through MOMRA’s website, providing information about the project, its location, its size, its components, its design, its budget, its timeline, and its compliance with the building codes and standards. The investor also needs to provide supporting documents, such as the land plot allocation letter from the RDA, the architectural drawings, the structural drawings, the mechanical drawings, the electrical drawings, the fire safety drawings, the environmental impact assessment report, the soil investigation report, the geotechnical report, the traffic impact study report, and the contractor’s license. The application fee is SAR 5 per square meter (USD 0.0013 per square foot). MOMRA will review the application and issue a building permit within 15 working days if all requirements are met.
- Design and construct the project with the help of a contractor. The investor needs to hire a qualified and experienced contractor to design and construct the project according to the specifications and standards approved by the RDA and MOMRA. The investor needs to sign a contract with the contractor that defines the scope of work, the quality of work, the payment terms, the completion date, and the penalties for delays or defects. The investor also needs to supervise and monitor the progress of the work and ensure that it meets the expectations and requirements. The investor can choose from various contractors operating in Saudi Arabia, such as Saudi Real Estate Infrastructure Co. (Binyah), or Oxford Business Group.
- Market and sell the units with the help of a real estate agent. The investor needs to hire a licensed and experienced real estate agent to market and sell the units in the project to potential buyers or tenants. The investor needs to sign an agreement with the agent that defines the commission rate, the marketing strategy, the sales targets, and the exclusivity period. The investor also needs to provide information and documents about the project, such as brochures, floor plans, price lists, contracts of sale or lease agreements. The agent will advertise and promote the project through various channels such as online platforms (e.g., Aqarmap, Bayut, or Property Finder), newspapers (e.g., Arab News, Saudi Gazette, or Al Riyadh), or exhibitions (e.g., Restatex, Cityscape, or Riyadh Real Estate Forum). The agent will also arrange viewings and negotiations with interested parties and finalize sales or leases on behalf of the investor.
- Operate and maintain the facilities with
the help of a facility management company. The investor needs to hire a professional and reliable facility management company to operate and maintain the facilities in the project, such as security, cleaning, landscaping, waste management, parking, utilities, and repairs. The investor needs to sign a contract with the company that defines the scope of services, the quality of services, the payment terms, the duration of the contract, and the penalties for breaches or complaints. The investor also needs to monitor and evaluate the performance of the company and ensure that it meets the standards and expectations. The investor can choose from various facility management companies operating in Saudi Arabia, such as Lynx Properties, Prime Development, or Al Kifah Holding.
Outcome: The investor successfully developed the mixed-use project in Riyadh within three years. The project consists of a 40-story tower that includes 300 residential units, 200 hotel rooms, 100 office spaces, and 50 retail outlets. The project also features a rooftop garden, a swimming pool, a gym, a spa, a cinema, and a conference hall. The project attracts high demand and occupancy rates from local and international customers who seek modern and convenient living and working options in Riyadh. The project also contributes to the RDA’s vision of transforming Riyadh into a vibrant and sustainable city that offers diverse opportunities and experiences for its residents and visitors.