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Saudi Arabia's fully state-owned Al Balad Development Company (BDC) has introduced a USD3.6 billion investment portfolio designed to boost the hospitality sector in the historic Al Balad district of Jeddah. The initiative plans to deliver more than 3,300 hotel units ranging from mid-scale to luxury segments over the period from 2025 to 2038, using flexible models including public-private partnerships, investment funds and joint ventures. This move aligns with the broader national aim under Vision 2030 to diversify the economy away from oil by promoting tourism and hospitality. Historically, BDC was established by the Public Investment Fund (PIF) to transform Al Balad into a global cultural and heritage destination.
The Saudi sovereign fund-owned Al Balad Development Company has launched a new USD3.6 billion portfolio aimed at the hospitality sector in Jeddah's historic district. The firm will develop more than 3,300 hotel keys across categories from mid-scale to luxury through a 13-year plan stretching from 2025 to 2038. Advertisement
Project breakdown details reveal the portfolio will include 422 hotel apartment units, 1,246 mid-scale hotel keys, 664 upscale keys, 758 upper-upscale keys and 325 luxury keys.
The investment will be executed via a range of flexible financing and operational models including public-private partnerships (PPPs), investment funds and Build-Operate-Transfer (BOT) contracts. This marks an evolution from solely public sector development toward more collaborative structures with the private sector.
This initiative is part of Saudi Arabia's push to diversify its economy beyond oil by expanding tourism and hospitality key components of the Vision 2030 reform agenda. The Al Balad district redevelopment has been underway since the establishment of Al Balad Development Company in 2023, when the PIF announced it would lead transformation of the heritage area, covering approximately 2.5 million mtotal development area with 3.7 million m built up area including 9,300 residential units, 1,800 hotel units and around 1.3 million m commercial/office space.
According to the company's chief executive, the announcement marks a qualitative step in the journey to revitalise the heritage district, combining development leadership with empowerment of the private sector to create sustainable investment opportunities in a unique heritage environment.
The move follows earlier groundwork by the PIF-backed BDC, which was set up to create an integrated environment that attracts residential, work, cultural and recreational development, while preserving the coral-limestone architecture of Al Balad, a UNESCO World Heritage site.
In summary, the latest portfolio represents a targeted bid to build up hospitality capacity in the historic heart of Jeddah and to attract both domestic and international tourism, while aligning with the Kingdom's economic transformation goals.
Source Reuters
5th Jun, 2025
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