Makkah demolitions a windfall for investors
At least 40 businessmen vying to buy properties in undeveloped areas
Heavy equipment being used to tear down buildings in Makkah to make way for new development.
26 August 2013 - 19 Shawwal 1434 HAt least 40 businessmen vying to buy properties in undeveloped areas
Heavy equipment being used to tear down buildings in Makkah to make way for new development.
MAKKAH — More than 40 traders investing in used furniture are competing to buy the contents, appliances and steel scrap of buildings to be demolished in Makkah for the development projects under way in the holy city.
More than 20,000 units in residential and commercial buildings, including hotels, shops and furnished apartments, have been demolished so far.
According to industry sources, the returns made from the selling of the furniture, steel scrap and other contents of these buildings had reached more than SR1 billion.
The sources said the demolition of buildings in Makkah has created a lucrative business for Saudis and foreigners from inside the Kingdom and abroad. The trading hours extend from 8 a.m. to 10 p.m. daily.
The sources said investors have rented courtyards on the outskirts of Makkah where they keep the furniture and scrap to sell to interested buyers.
Ahmed Khalil, a Saudi investor, said the demolition of buildings in Makkah has provided large quantities of construction material, sanitary equipment, bedroom and kitchen sets, electric appliances and other material needed by people who have buildings under construction and also by scrap traders.
He said the size of the building to be demolished and the number of its stories usually determines its price.
Faisal Aljohani, another investor, said buying the buildings slated to be demolished is a very profitable business.
“Makkah is the top city in the Kingdom when it comes to the number of the housing units to be demolished for expansion and development projects,” he said.
He said the investors negotiate the prices with the owners of properties marked for demolition.
“The prices range from SR1 million to a few thousand riyals depending on the size of the housing unit and the quality of its furniture, especially the tiles, marble, doors, windows, lifts and electrical and sanitary wares,” he said.
Aljohani said buyers come from various parts of the Kingdom but the majority of them are from Taif and Jeddah. “There is also demand from some neighboring Arab countries, such as Yemen, Sudan and Egypt, as well as African countries like Kenya and Guinea,” he said.
Aljohani said most of the demand from abroad is for blankets, doors, windows and furniture.
He said the demand for the scrap steel is very high but contractors demolishing the buildings themselves buy them. “The price of a ton of scrap steel is about SR1,000, which is very cheap. This is a windfall for these contracting companies,” he said.
He said the Saudi Electricity Company does not pull out copper cables from demolished buildings. “African scavengers always look for these cables to extract them, sometimes subjecting themselves to the danger of electrocution,” Aljohani said.
The price of a 18 ton window air conditioner is about SR1,000, while it is SR1,200 for the 24 ton units.
A small fridge costs SR150, the bed covers are between SR15 and SR20, the doors range from SR100 to SR200, while the price of a steel cupboard may be about SR200.
Khaled Al-Balawi, a Saudi buyer from Tabuk, said he came all the way from the north of the Kingdom after a friend had advised him to buy the building materials for the house he was constructing from Makkah.
“I bought good doors, windows and a lift at very reasonable prices,” he said.
Saleh Al-Rubaie, a buyer from Taif, said he bought an elevator for the building he is contracting in the summer resort.
“The lift prices range from SR20,000 to SR30,000, which are extremely reasonable,” he said.
Industry sources said Makkah has become an important exporter of second-hand building material to other cities and towns providing them with construction equipment at affordable prices.
A number of investors are bracing to compete in the purchase of buildings in the underdeveloped areas of Al-Tandbawi, Al-Mansour and Al-Nakasa over the next few weeks.
http://www.saudigazette.com.sa/index...20130826178187
