Industrial Cities
Industrial Land available in the Kingdom
There are five options for acquiring land for industries in Saudi Arabia for investment purposes:
- Industrial cities run by the Saudi Industrial Property Authority (MODON).
- Municipality lands allocated for industrial purposes for small factories, workshops and warehouses.
- Industrial cities supervised by the Royal Commission for Jubail and Yanbu.
- Industrial lands owned by development companies licensed by MODON.
- Industrial lands available in the Economic cities supervised by Saudi Arabian General Investment Authority (SAGIA).
Industrial cities run by the Saudi Industrial Property Authority (MODON).
Saudi Arabia’s fourteen “industrial cities”, comprising 92.8 million square meters, are managed by the Saudi Industrial Property Authority (MODON). Each industrial city has an on-site Administration to handle the day-to-day needs of investors and oversee the site development process.
The primary task of MODON is planning industrial cities in the Kingdom and to encourage establishment, development and management, maintenance and supervision including, but not limited to, the following:
· Implement the strategy to develop the industrial cities;
· Develop rules and procedures relating to the establishment of industrial cities and their development, management, maintenance and operation.
· Propose appropriate locations of land belonging to the state to establish industrial cities and recommend necessary suggestions to the Supreme Economic Council for approval and adoption by the Council of Ministers for specific industrial city. Also, acquire land owned by the private sector and licensing for its development by the private sector for specific industrial cities according to its regulations and executive statute.
· Cooperate with the relevant authorities to provide services and necessary facilities to set limits of industrial cities.
· Encourage the private sector to establish, develop, manage, operate and maintain industrial cities.
· Grant licenses to developers/operators of specific industrial city in accordance with its bylaws.
· Take necessary steps to protect the environment in specific industrial cities in coordination with the relevant authorities.
· Supervise the performance of developers/operators to ensure their commitment to the terms of development and operation, or any one of these; and successful implementation of terms and conditions.
· Seek to resolve disputes amicably between the developers and operators of industrial cities and between specific users or tenants and residents.
· Encourage establishing modern technology zones and their expansion by providing necessary services and support entrepreneurs for their innovative ideas.
The following table shows the area, location and contact numbers of these industrial cities.
| Industrial City | Total Area (M²) | City Contact Numbers | |
| Phone | Fax | ||
| Riyadh 1st. | 451,000 | 01-265 2061 | 01-265 2059 |
| Riyadh 2nd. | 18,786,000 | 01-265 2280 | 01-265 2059 |
| Jeddah 1st. | 12,807,000 | 02-636 4929 | 02-636 4712 |
| Dammam 1st. | 2,704,000 | 03-847 3331 | 03-847 2509 |
| Dammam 2nd. | 25,487,000 | 03-812 1019 | 03-812 1118 |
| Makkah | 730,117 | 02-520 4927 | 02-520 1791 |
| Qaseem | 1,542,934 | 06-322 0649 | 06-322 0581 |
| Ahsa | 1,543,000 | 03-5330144 | 03-533 0533 |
| Madinah | 9,949,000 | 02-636 4929 | 02-636 4712 |
| Assir | 2,663,000 | | |
| Al-Jouf | 3,000,000 | | |
| Tabuk | 4,000,000 | | |
| Hail | 2,560,000 | | |
| Najran | 6,550,000 | | |
| Total Area | 92,773,051 | | |
Source: Saudi Industrial Property Authority (MODON)
Industrial Estates in Different Regions of the Kingdom
Land in the industrial cities is leased on a renewal basis for a fixed period of 25 years. Current lessee have the right to not to renew further under the same terms and conditions. The current annual leasing rate in industrial cities includes fee for security, fire and road maintenance, etc. and fixed at SR 1 (US $ 0.26)/sq. meter, which is collected in advance. Normally, it takes 1 week to 3 months to obtain a land on lease in the industrial city.
The newly enacted Regulation of Ownership and Investment in Real Estate for Non-Saudis allows for “a non-Saudi investor of natural or legal character licensed exercising any professional, vocational, or economic activity” to “possess real estate required for performance of that activity.” This right includes “property necessary for his residence and housing for his workmen.” However, if the “license includes the purchase of buildings or land for the construction of buildings thereon… the total actual costs of the project – both land and buildings – shall not be less than SR 30 million” (US $8 million). Development of this land must be carried out within five years of the purchase date.
Municipality lands allocated for industrial purposes for small factories, workshops and warehouses
The land in urban area and its surrounding fall within the purview of the municipality, which grants permission for commercial exploitation establishing small factories, workshops and warehouses.
Investor may only lease municipally owned land for a pre-approved purpose. Typically, the municipality will designate a piece of land for a specific use and then hold a public auction at which private bidders compete for the right to develop the site and manage it according to the city’s plans.
Contact the Ministry of Municipalities and Rural Affairs for information on how to participate in a municipal auction.
Investor may only lease municipally owned land for a pre-approved purpose. Typically, the municipality will designate a piece of land for a specific use and then hold a public auction at which private bidders compete for the right to develop the site and manage it according to the city’s plans.
Contact the Ministry of Municipalities and Rural Affairs for information on how to participate in a municipal auction.
Industrial cities supervised by the Royal Commission for Jubail and Yanbu
The Royal Commission for Jubail and Yanbu controls two major industrial sites located on Saudi Arabia’s eastern and western coasts. Investors in these areas are focused on various oil and petroleum-related activities. Businesses are classified in the zone in three tiers:
· Primary industries, including ethane and methane petrochemical and fertilizer manufacturers
· Secondary industries, such as plastics and synthetic materials producers
· Support and light industrial companies such as food servers, car rental providers, packaging plants and shipping agents.
The lease terms are fixed and renewable. Lease terms for the various types of business are:
· Primary industries – 30 year lease
· Secondary industries – 20 year lease
· Support and light industries – ten year lease
Jubail
Jubail is located on the Arabian Gulf. For detailed information on Jubail’s infrastructure, click here.
To get a description of the services available to investors in Jubail, click here.
There is a plan to develop 14,000 hectares to nearly double the Jubail industrial zone, compared to the area’s current size.
Yanbu
Yanbu is located north of Jeddah on the Red Sea. It hosts major industrial projects, including three oil refineries, a petrochemical plant, and several small and supporting industries.
For detailed information on Yanbu’s infrastructure, click here.
For detailed information on Yanbu’s infrastructure, click here.
Industrial lands owned by development companies licensed by MODON
Investors may purchase or lease land owned by private developers licensed by MODON. The role of MODON is to direct investors to these industrial cities licensed by MODON and to provide them with extensive background data, ways of communication with these industrial cities and to serve the investors in acquiring industrial land in these privately developed industrial cities.
In private land transactions, the role of the state is limited. The price is negotiated between buyer and seller and facilitators, including land brokers and lawyers, who tend to arrange for private land sales. Once a private purchase agreement has been negotiated, an investor must go to the local Shariah Court to ensure that the land in question is duly owned by the seller and record transfer of title to the buyer. The Court will stamp a title document to indicate the legal transfer of ownership.
[Courtesy: Saudi Arabian General Investment Authority - SAGIA]
Other Links
Search
Newsletter Subscriber
Visitors Detail
Visitors
| Total: | 1379 |
User Statistic
Total Members : 90
Latest Member : malik_rehmatullah@hotmail
Members Online : 0
Today : 0 Registers
This Week : 0 Registers
This Month : 0 Registers
Latest Member : malik_rehmatullah@hotmail
Members Online : 0
Today : 0 Registers
This Week : 0 Registers
This Month : 0 Registers