Focusing on the expansion of the tourism industry, Saudi Arabia continues to develop the Makkah region and one of its flagship projects, King Abdul Aziz Road (KAAR). The investment is foreseen to contribute to the hospitality segment and create opportunities for additional steel demand.
Makkah’s Umm Al Qura Development & Construction Company, a joint-stock company for the development, construction and operation of KAAR, and Alinma In- vestment created Makkah Real estate Development Funds, Reuters reported. The capital is estimated at SAR 17 billion ($4.53 billion; $1 = SAR 3.75) and will be allocated for the construction of seven hotel towers and two commercial complexes to deploy KAAR. It is believed to speed up the project implementation and contribute to Makkah region development overall, Metal expert understands.
Saudi Arabia strongly relies on the Makkah region in the expansion of the tourism industry and diversification of the national economy, as it represents a historical and cultural heritage of the country. Aiming to benefit from the development of religious tourism, KSA is focusing on several construction projects including North Haram project ($9.3 billion), Makkah Metro ($8.8 billion), Jebel Al Kaaba project ($5.7 billion), Abraj Kubai Makkah project ($3.5 billion) etc., Metal expert reported.
The KAAR project, if steadily carried out, is expected to contribute to the development of local real estate, as well as the hospitality and the tourism segments. With its sizable investments, it will become another source of local demand for building materials, steel in particular. However, the benefits for the steel sector will be most probably seen in the long run.