PIF establishes Gulf Coast tourism developer in Khafji

Saudi Arabia’s Public Investment Fund has established Gulf Coast Development Company to build a large tourism and residential destination along the Al-Khafji coastline near Kuwait, extending the sovereign wealth fund’s investment drive into the northern Eastern Province.

PIF said on Monday the new company would develop the project with private-sector partners and local and regional investors, targeting demand for housing, hospitality and tourism facilities in an area positioned to attract visitors from Saudi Arabia, Kuwait and other Gulf states.

The development will cover about 20 square kilometres and include a 10-kilometre waterfront on the Arabian Gulf. Once completed, it is planned to contain eight residential neighbourhoods with more than 16,000 housing units, about 1,400 hotel rooms, commercial and tourism facilities, educational amenities and dedicated boat marinas.

Construction is planned in three phases. PIF said the first phase, scheduled for completion in 2030, would deliver three neighbourhoods and establish the initial tourism and residential community around which later stages would be developed. The fund did not disclose the project’s total cost.

PIF said the waterfront, marinas and mixed-use facilities would be planned as part of an integrated destination, while access from Kuwait and Gulf markets was expected to support visitor flows and residential demand.

The launch places Al-Khafji within PIF’s Urban Development and Livability ecosystem, one of six investment ecosystems set out in the fund’s 2026-2030 strategy. That framework puts greater emphasis on integrating PIF-backed projects with private capital while seeking long-term financial returns and broader economic activity.

Saad Alkroud, PIF’s head of local real estate investments, said the company would use Al-Khafji’s cultural and logistical advantages to create opportunities for residents and improve local infrastructure. He said the project would also strengthen private-sector partnerships designed to maximise value and generate sustainable returns.

Al-Khafji’s location is central to the project’s commercial rationale. The governorate lies close to Saudi Arabia’s border with Kuwait, giving the planned destination access to population centres on both sides of the frontier and to travellers from the wider Gulf. PIF said the development was intended to respond to growing accommodation and tourism demand in the northern part of the Eastern Province.

The initiative also adds another large property and tourism project to Saudi Arabia’s economic diversification programme, which has channelled substantial state investment into housing, hospitality, transport, entertainment and urban development. Tourism has become a major component of the kingdom’s Vision 2030 programme as authorities seek to expand non-oil activity and attract more domestic and international visitors.

Saudi Arabia recorded 123 million tourists in 2025, including more than 30 million international visitors, according to the Vision 2030 annual report. The government has raised its ambition to 150 million visitors annually by 2030 after achieving its earlier target of 100 million visitors ahead of schedule.

PIF has become the principal state investment vehicle behind many of the kingdom’s diversification projects. Its 2025 annual report showed assets under management exceeding $900 billion and cumulative investment of more than $199 billion in new projects in Saudi Arabia between 2021 and 2025.

The fund’s strategy for 2026 to 2030 marks a shift towards what it calls value realisation, with stronger focus on financial returns, private-sector participation and interconnected domestic investment ecosystems. Urban development and livability sits alongside tourism, travel and entertainment, industrial and logistics investments, advanced manufacturing, clean energy and infrastructure, and the Neom ecosystem.

PIF said its property investments are designed to create platforms in which private developers, operators and service providers can participate rather than relying solely on state-led delivery. The Al-Khafji company is expected to follow that model by drawing in local and regional investors throughout the development process.

Al-Khafji is also an established oil-producing centre near the Partitioned Neutral Zone shared by Saudi Arabia and Kuwait. The offshore Khafji oil field is operated jointly through entities linked to Saudi Aramco and Kuwait Petroleum Corporation, making the coastal city economically significant beyond its planned tourism expansion.