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The Red Sea is making waves in the luxury real estate market, and it’s not just the stunning views that are turning heads. Nestled along the west coast of Saudi Arabia, this emerging destination is being developed by Red Sea Global, a company backed by the kingdom’s impressive $1 trillion sovereign wealth fund. With luxury villas and apartments sprouting up on Laheq Island, the area is quickly becoming a symbol of Saudi Arabia’s property boom.
A Glimpse into Laheq Island
Laheq Island is the crown jewel of Red Sea Global’s $27 billion portfolio, featuring luxurious residences priced up to $40 million, with apartments starting at 5.5 million riyals (about $1.5 million). Saudi Arabia has recently opened its property market to overseas buyers, making developments like Laheq vital for attracting foreign investment. The kingdom aims to become a premier holiday destination for tourists and Hajj pilgrims, hoping ultra-wealthy individuals will buy these properties as second or third homes.
The Landscape of Luxury Real Estate
While the Red Sea is advancing, Saudi Arabia’s luxury property market is still nascent compared to Dubai, where multi-million dollar properties sell rapidly. Faisal Durrani from Knight Frank notes that buyers in Saudi Arabia are limited, and although home prices have surged since 2019, transaction activity has slowed due to affordability concerns. Crown Prince Mohammed bin Salman recognizes the need to address rising property prices amid increasing living costs in cities like Riyadh.
Demand for Luxury Living
Despite challenges, demand for properties on Laheq Island remains strong, with buyers seeking multi-generational holiday homes and foreign investors, including a reportedly anonymous UK Premier League footballer. The Red Sea has long been a favorite for divers due to its rich marine life and one of the world’s largest barrier reefs. Historically limited tourist access has kept the area pristine, enhancing its appeal for luxury developments.
What to Expect on Laheq Island
Laheq Island is designed as an eco-friendly community for the ultra-wealthy, featuring 528 villas, 221 apartments, a golf course, marina, beach club, sailing and water sports schools, a souk, and two hotels. The southern part of the island is expected to open by 2028, offering numerous amenities for residents and visitors.
Red Sea Global has sold 1.5 billion riyals in residential properties and anticipates an additional 2 billion riyals in sales this year, primarily from Laheq Island. Currently, the company operates five hotels, with another 11 set to open soon. While room rates can reach 7,000 riyals a night, the new hotels will diversify offerings and attract a wider range of tourists.
Looking Ahead
With a new airport and increased international flights, the Red Sea is poised for a significant influx of travellers. Cheesebrough believes that more hotels will enhance the destination’s appeal for relaxation and investment. As Laheq Island develops, Saudi Arabia is set to make its mark on the global luxury real estate stage, making these developments worth watching for potential buyers and observers alike.