Riyadh: Saudi Arabia's west coast is seeing a dramatic change as Red Sea Global, the kingdom-backed developer of a $1 trillion sovereign wealth fund, launches its first fully residential complex on Laheq Island. The ring-shaped island, one of a $27 billion portfolio of resorts and properties, is being sold as a paradise for the world's ultra-high net worth individuals with houses available for up to $40 million.
Residences on the island begin at about $1.5 million, villas at between $4.8 million and $40 million, says Stephen Cheesebrough, development director of Red Sea Project. The resort will feature over 500 villas, over 200 apartments, two five-star hotels, and facilities including a golf course, marina, sailing schools, and a souk.
Saudi Arabia has only just opened its property market to foreign purchasers, and officials are expecting signature projects such as this to attract new foreign investment. Demand has already been received from affluent international purchasers, one of which is reportedly a Premier League football player, stressing the appeal of the project as a private and elite destination.
The project contrasts dramatically with other mega-projects such as Neom that have experienced delays, but hurdles still exist. Analysts note that Saudi Arabia’s luxury property sector is still in its early stages, especially compared to Dubai’s thriving market. Since 2019, home prices in the kingdom have soared, apartments by 96% and villas by 53%, but affordability remains a concern for middle-class residents, with Crown Prince Mohammed bin Salman pledging to address what he termed an “unacceptable” rise in property costs.
400-hectare Laheq Island is planned as a green community built around a lagoon. Development here is also planned to harmonize with the natural attractions of the area, such as one of the biggest barrier reefs in the world and untouched archipelagos much sought after by divers.
Red Sea Global has already offloaded 1.5 billion riyals' worth of property and anticipates another 2 billion riyals this year, the majority from Laheq Island. There are five luxury hotels now operational within its portfolio, with 11 more to be launched later this year. While international flights to the new Red Sea airport increase, the company sees tourism figures rising steadily, placing Saudi Arabia firmly on the map as an emerging luxury global destination.
