The Red Sea Development Company (TRSDC) is planning to sell luxury second homes on a new island as part of the second phase of the tourism project gradually begins to take shape. About 800 residential units — a combination of villas and condos, in addition to hotels, a marina and a golf course — will be delivered, John Pagano, chief executive of the TRSDC, said in an interview on Monday on the sidelines of the Arabian Travel Market in Dubai.
These high-end houses will go on sale by 2023 or 2024, appealing to buyers from Saudi Arabia or the GCC looking for a second home that is relatively nearby and in a comparatively cooler climate, Mr Pagano added. “We control virtually all the islands on the Red Sea, so to be able to buy a real estate property on an island that is highly serviced. It’s going to be a very unique proposition.
“This new project we will not start selling for another year or two because it’s at the early design stages. The designs have been approved, now we’re actually detailing the designs … you don’t sell off-plan too far in advance.” The Red Sea has summer temperatures that usually range between 30°C and 35°C, and second homes on the coast would be a short flight away for domestic or Gulf owners, he added.
“I see it as a great opportunity for the GCC market as well as Saudi Arabia to have a home that is relatively close: from Dubai, it is a two-hour flight, and you can be in beautiful turquoise water. It’s very different to the Arabian Gulf, the water quality and colour — it’s a very different experience,” Mr Pagano said.
Laheq, the new island being developed by TRSDC primarily for second homes as part of its Red Sea tourism project, will feature 500 villas, 300 condos and 300 hotel rooms, Mr Pagano said. “They’ll be expensive, the market will ultimately decide what we can sell for, but look at what is happening in Dubai and that should be your clue,” he said. “We haven’t settled on pricing yet.”
Phase two of the Red Sea project will include the development of four to five additional islands, with TRSDC currently evaluating locations and types of experiences that will be complementary to phase one, with decisions to be made by the year-end. The tourism destination’s dedicated airport is “virtually done” on the airside and is in the process of obtaining a licence so it can be used later this year, he said.
To date, about 800 contracts worth 25bn riyals have been awarded. On average, 1bn riyals to 1.5bn riyals a month’s worth of contracts need to be awarded for the projects to stay on track for completion, Mr Pagano said.
TRSDC last year signed nine management agreements with international hotel brands for the first phase of its luxury project, will announce three more such agreements in the pipeline this month, he said.
The large-scale projects being developed by companies such as TRSDC are part of the kingdom’s efforts to diversify its economy and cut its dependence on oil revenue. Development of non-oil sectors such as tourism are key planks of the kingdom’s Vision 2030 economic transformation agenda
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