JEDDAH: A road expansion project in Jeddah’s Bani Malik district has contributed to a 400 percent increase in the value of structures that now face the main road, according to real estate experts.
Some 25 structures from Palestine Road to the Old Airport area have been demolished as part of a project to widen Prince Majed Street. “After the demolition of the first row of structures facing the road, properties inside became exposed giving them an unexpected boost in value,” said Fadi Zahran, a real estate agent.
Structures that now face the main road previously had a real estate value of around SR1,000 per square meter.
The municipal budget for compensating property owners in the area exceeds SR45 million.
Zahran said the real estate value would vary according to the type of commercial license that can be obtained from the municipality.
“The value varies according to the number of stories the municipality approves for buildings along the expanded road,” he added.
Ahmad Zain, real estate office owner, said Bani Malik was considered one of Jeddah’s unorganized districts, as many structures in the area did not have ownership deeds.
He said these structures would be worthless unless owners manage to come up with deeds for their properties, in which case they could claim compensation.
“Because those structures are without official deeds, the municipality will not issue commercial licenses for them and thus they will remain empty even though they face the main road,” he said.
He said structures are issued deeds on a case-by-case basis depending on the background and age of each structure.
“Owners should start looking for ways to obtain deeds for their properties because they have a windfall investment opportunity,” he said.
Ahmad Al-Ghamdi, head of media relations at the municipality, said building owners could now apply for commercial licenses. “These land owners are eligible to have a main-road investment license that allows them to construct commercial structures facing the road,” he said.
The project includes a flyover and an underpass in addition to widening of the road.
