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REAL ESTATE AND DEVELOPMENTExhibit 138: Economic cities – FactsParametersKing Abdullah EconomicCityJazan Economic CityPrince Abdul Aziz BinMousaed Economic City Knowledge Economic CityArea (mn sqm) 168 100 156 4.8Investment size (USD bn) 27 27 8 7Jobs 1mn 100,000 55,000 20,000Population 2mn 300,000 300,000 150,000ZonesFocusSource: SAGIASea port, industrial zone,central business district,water-front resort area,education zone andresidential zonesPorts, logistics, light industryand servicesIndustrial park (will occupy2/3 of the city), sea port,agriculture repackaging anddistribution, fisheries,business and cultural centre,health and education areasHeavy industries, lifestyle,agro industries and peopledevelopmentLogistics and transportationcentre, dry port, internationalairport, petrochemical andagriculture industries centre,business and knowledgecentre, mining centre andentertainment areaLogistics, agribusiness,minerals and constructionmaterialTaiba complex, technologicaland administrative colleges,theme parks, business centre,residential and commercialareas, passengers station,King Abdul Aziz MosqueKnowledge based industries,tourism and servicesExhibit 139: Six economic cities distributed throughout the countrySource: SAGIA, NCBC ResearchFalling prices and rising rentsOn the pricing front, in recent years, Saudi real estate firms have been enjoying the benefits ofescalating real estate prices led by growing demand-supply mismatch. However, the currentglobal crisis has bought prices under pressure. Real estate companies in Jeddah recentlyslashed prices of new apartments and villas by 12.0% owing to the global downturn. Moreover,the pace of development of many projects has slowed down in recent months, hit by the crisis.Although real estate priceshave been falling in theKingdom, rental yields have stillbeen rising in certain pocketsIt is important to note that while prices have fallen, this is not necessarily true of rentals. Giventhe lack of a clearly defined mortgage regulatory structure and low median incomes, the abilityof Saudis to purchase a property is reduced. This, combined with the slowdown in propertysupply across the Kingdom, is resulting in a situation where rentals are actually increasing incertain pockets. Consequent to this, rental yields have been rising in certain areas of theKingdom.The mortgage lawThe pending mortgage law, which will enable Saudis to avail amortized mortgages as opposedto long-term loans at rates of 3.5% to 5.0%, when passed, is likely to elicit demand from a widerJUNE 2009SAUDI ARABIA FACTBOOK89