PIF’s Cruise Saudi outlines port development plans, hires senior staff

PIF’s Cruise Saudi outlines port development plans, hires senior staff
Cruise Saudi sees strong potential in Saudi Arabia's Red Sea coast. (AN)
Short Url
Updated 18 March 2021

PIF’s Cruise Saudi outlines port development plans, hires senior staff

PIF’s Cruise Saudi outlines port development plans, hires senior staff
  • Routes will allow passengers to explore KSA cultural sites
  • Major employment boost for local tourism sector

JEDDAH: Cruise Saudi has hire more senior executives as it begins to ramp up operations and has also revealed plans to invest in the development of ports along the Red Sea coast.
Barbara Grabenweger and Serafin Blazquez have been appointed to focus on Cruise Saudi’s port and shore excursion operations.
Launched by the Saudi Public Investment Fund (PIF) in January, Cruise Saudi aims to put the Kingdom on the international cruise map as a tourist destination while generating more than 50,000 jobs in the local tourism industry.
Grabenweger previously worked for Royal Caribbean Group and ITM-Group Mexico, while Blazquez was previously with Intercruises Shoreside and Port Services, and Global Ports Holding.
As director of shore excursions and product development, Grabenweger will oversee service delivery and work with local businesses to develop passenger activities at ports of call.
Blazquez will take on the role of executive director of port and terminal operations with a focus on prioritizing the preservation of the Red Sea’s ecosystem, while developing potential commercial opportunities.
Cruise Saudi will develop routes that allow passengers to explore the Kingdom’s heritage and culture, including UNESCO World Heritage sites.
Speaking at the recent Seatrade Cruise Virtual: Expedition Cruising webinar, Ghassan Khan, chief strategy officer at Cruise Saudi, revealed plans to develop ports along the Red Sea and Arabian Gulf.
“We are focusing on developing six destinations within the next few years, but for this year, we will be activating three cruise facilities along the Red Sea – Jeddah, Yanbu, and Al-Wajh,” said Khan in an interview with Seatrade Cruise.
Three of Saudi Arabia’s five UNESCO World Heritage sites are close to the ports that Cruise Saudi plans to target. “We are in an age of mass tourism and selfie sticks, and these sites are fresh air for expedition tourists,” he added.
Khan pointed out that there was vast potential for the Kingdom to become an important source market for the global cruise sector.
“This is the first time in decades that a new cruise destination has truly opened up, and it’s really a milestone for us as a company and a country, and I believe for the cruise industry as well,” he said.

Oil, equities appear to shake off Evergrande worries

Oil, equities appear to shake off Evergrande worries
Updated 21 September 2021

Oil, equities appear to shake off Evergrande worries

Oil, equities appear to shake off Evergrande worries
  • Evergrande, founded in 1996, is one of China’s biggest builders of apartments, office towers and shopping malls

LONDON: Oil and equities finally appeared to shake off concerns that have plagued financial markets in recent days following the crisis at China’s largest property group Evergrande.

Most economists now believe there is little risk of wider global financial market contagion from the problems at Evergrande which is on the verge of defaulting on its massive $300 billion debt pile.

Indeed, it emerged that funds run by US asset management giant BlackRock and global bank HSBC appeared to have embarked on a “buying the dip” strategy and increased their holdings of Evergrande bonds as the developer’s liquidity crisis was intensifying.

Data by Morningstar reveals BlackRock bought up five different Evergrande dollar bonds through one of its high-yield funds, which had holdings in the developer then worth $18 million, in August.

An HSBC-run high yield fund also purchased Evergrande’s debt over the summer. The Morningstar data revealed the fund increased bond holdings by 38 percent since February, but the value of the fund’s total exposure at $31m declined over the same period due to falling prices.
Ashmore, the emerging market investment specialist, is understood to have the highest exposure with more than $400 million of its bonds. UBS had close to $300 million of exposure to Evergrande bonds.

Patrick Ge, manager research analyst at Morningstar, said: “We’ve seen a few funds adding to China Evergrande between July and August 2021, given widening spreads and attractive valuations. This is in line with what we have heard from some managers where they said that at its current levels, they believe Evergrande is a buy.”

Evergrande’s Hong Kong-traded shares have fallen 85 percent this year and its bonds have also been downgraded by global credit ratings agencies.

Simon MacAdam from Capital Economics said: “A managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence.”

However, Chinese regulators, who are understood to be looking at breaking the company up, have so far failed to provide any details about how they will resolve Evergrande’s $300 billion debt pile.

China watchers only expect the government to intervene if the company and its lenders fail to agree on how to handle its debts.

JP Morgan analyst, Frank Pan, said Evergrande was likely to go through the same process as developer China Fortune Land, which defaulted on $530m of dollar-denominated debt earlier this year.

Pan said: “That means a standstill for all creditors while allowing operations to continue.”

After a decade of warnings from economist on the threat posed by China’s rising debt levels, Beijing’s financial regulator last year imposed much tighter limits on real estate-related borrowing.

Evergrande has $18 billion of outstanding foreign-currency bonds, mostly held by Chinese banks and other institutions. 

Fears persist that China’s property sector, which has been a central engine of the country’s economic expansion, is facing an unprecedented slowdown because of the current tightened credit conditions.

If property companies default on their debts, investors who hold their bonds could find their finances under pressure, forcing them to sell other investments to raise cash, which could in turn impact on other markets beyond property and beyond China.

Evergrande, founded in 1996, is one of China’s biggest builders of apartments, office towers and shopping malls.

It is estimated to have more than 200,000 employees and supports almost 4 million jobs in construction and other industries through 1,300 projects in 280 cities across China.

Evergrande’s founder, Xu Jiayin, was China’s richest entrepreneur in 2017 with a net worth of $43 billion and remains the country’s richest real estate developer.

CMA approves Al Hasoob's listing on Nomu

CMA approves Al Hasoob's listing on Nomu
Updated 21 September 2021

CMA approves Al Hasoob's listing on Nomu

CMA approves Al Hasoob's listing on Nomu

RIYADH: Al Hasoob, the computer and electronics retailer with seven branches throughout Saudi Arabia, has won Capital Market Authority (CMA) approval to list on the parallel Nomu market.

The offer of 280,000 shares to qualified investors represents 20 percent of the company’s share capital, the CMS said in a filing on Tuesday.

No date was provided for the listing, but the CMA's approval is valid for six months and will be cancelled if the offering and listing of the Company's shares does not happen within this period.


Saudi per capita GDP up 28%

Saudi per capita GDP up 28%
Updated 21 September 2021

Saudi per capita GDP up 28%

Saudi per capita GDP up 28%

RIYADH: Saudi Arabia's per capita gross domestic product (GDP) surged by 27.9 percent in the second quarter of 2021 compared to the same period in 2020, official data has revealed.

The dramatic growth means the Kingdom's GDP per capita went from SR16,115 to SR20,605 - meaning the quarter was the highest since the fourth period of 2019, which at that time amounted to SR22,290.

The Q2 2021 rise is also a 3.6 percent increase on the previous quarter. 

The GDP increased during the second quarter of 2021 by 30 percent compared to the same period in 2020 to reach SR735.03 billion, according to the General Authority GASTAT.

The private sector accounted for 48 percent of GDP, followed by the oil sector with a share of 29.3 percent, and the government sector with a share of 22.6 percent.

GDP is final spending at buyers' prices, and includes government final consumption spending, private final consumption spending, gross capital formation, and net exports.

Middle East’s ‘pent-up’ demand for London property predicted to explode

Middle East’s ‘pent-up’ demand for London property predicted to explode
Updated 21 September 2021

Middle East’s ‘pent-up’ demand for London property predicted to explode

Middle East’s ‘pent-up’ demand for London property predicted to explode

Middle Eastern property investors frustrated by the pandemic are buying real estate in London without even travelling to the UK, according to a leading housing developer.

Stuart Leslie, international sales and marketing director at Barratt Homes, made the claim as he spoke of the “pent up demand” for properties in the UK capital by the region’s investors.

Speaking from a new development in East London, Leslie said his company had been fielding enquiries from people in the Middle East who were looking to buy property despite being unable to visit the UK because of travel rules relating to COVID-19.

From Monday October 4, travellers to the UK from Middle Eastern countries, including Saudi Arabia, Bahrain, and Kuwait, will no longer have to isolate for 14 days upon arrival - provided they have received two vaccine doses.

Leslie predicts this loosening of restrictions will see a surge of activity from Middle Eastern investors in the UK market.

He said: “There is a pent-up demand from the Middle East which we’ve never seen before really, to the extent that even the last few months we’ve started to receive enquiries by people looking to make institutional investments or buy-to-let investments even without visiting the UK, which is very unusual for that market.”

Leslie added: “There’s the news that they will be able to travel but it will take a few weeks for those bookings to go up but obviously investors are already getting in touch and clearly there is a pent-up demand from the Middle East.”

While west London had been the traditional source of much Middle East investment, cash is now flowing to the east of the UK capital, said Leslie, which is benefiting from infrastructure developments including the new Elizabeth Line which will see trains reach Heathrow Airport, west of London, in around 45 minutes.

“Investors are really looking for what is the best value for money we can get in London at the moment in a good rental market and they don’t really mind where it is,” he said, adding: “I don’t think they’re looking for either ‘golden postcodes’ or particular areas, they are really chasing that value and that return on investment.”

Signs the market was coming back to life were visible earlier this year, when real estate consultancy Knight Frank revealed that 16 percent of all sales to overseas buyers in the first three months of 2021 were to Middle Eastern buyers, up from less than 10 percent in the second and third quarters of last year.

This was the highest proportion of Middle Eastern interest since the outbreak of COVID-19 in the UK, according to Knight Frank.

World’s largest eco-tourism project, TRDSC, to takeover its neighbor: CEO

World’s largest eco-tourism project, TRDSC, to takeover its neighbor: CEO
Updated 21 September 2021

World’s largest eco-tourism project, TRDSC, to takeover its neighbor: CEO

World’s largest eco-tourism project, TRDSC, to takeover its neighbor: CEO
  • The consolidation deal will see The Red Sea Development Co. (TRSDC) taking over Amaala, both owned by the PIF

DUBAI: Saudi Arabia’s Public Investment Fund is combining two giga project developers on the Red Sea coast to “leverage synergies” as the Kingdom goes ahead with ambitious tourism goals.

The consolidation deal will see The Red Sea Development Co. (TRSDC) taking over Amaala, both owned by the PIF, but the tourist destinations they are developing will retain “separate, distinct” identities, Chief Executive Officer John Pagano told Arab News.

“Amaala has its own unique positioning and branding, which is not going to change, as well as the Red Sea project,” he said on the sidelines of the Arabian and African Hospitality Investment conference in Dubai

Pagano added: “Amaala is focused on wellness, while the Red Sea project is very much focused on eco-tourism – that is not going to change.”

It follows a move that saw Pagano being appointed as the CEO of Amaala in January this year.

“We said we would look at the way at which we could combine the organizations, and look to leverage synergies between the two groups,” Pagano said.

He explained: “We are going to leverage the unique skill sets that both project teams have and use them for the better good of both projects.”

The consolidation will also allow both destinations to boost operational efficiencies, he added.

There was no value to the transaction, Pagano said, describing the move as just a consolidation of two companies, which are both owned by one entity anyway.

‘Regenerative tourism’

The Red Sea Development Co. alone is building over 28,000 square kilometers of land and water along the Kingdom’s west coast. It will feature mountain canyons, dormant volcanoes, as well as ancient and cultural heritage sites.

Its first phase is expected to be finished by 2023, where 16 hotels will be opened. The project targets some 50 resorts with 8,000 hotel rooms by 2030.

These massive plans have raised questions from environment advocates, but Pagano maintains regeneration remains a key component of the project.

“Sustainability is no longer enough. We have moved our narrative to regeneration,” he said.

Pagano said it is not simply just about “causing no harm” to the environment, but actively looking for ways to improve the destination and “leave it in a better state than we found it.”

The company has announced a number of initiatives to keep this promise – from small regulations such as banning single-use plastic to big operational plans including using renewable energy to power the destination.

“We are going to be the largest tourism destination in the world powered by 100 percent renewable energy – 24 hours a day, completely off-grid,” Pagano said.

To achieve this, Pagano said they are installing what he claims to be the largest battery storage system in the world.

The company also engages in improving biodiversity on the Red Sea, including working with the scientific community to grow corals.

This level of commitment is also shared by international brands who plan to invest in the Red Sea project, Pagano said, as the bigger hotel industry becomes more conscious about global environmental goals.

“International brands support our vision, otherwise we would not be dealing with them,” he said. These brands will be announced at the Future Investment Initiative summit in Riyadh next month.

Financing the ambition

The CEO said they “will come to market next year with a similar approach for Amaala,” referring to the $3.7 billion financing it secured in April that already covered capital infrastructure for the Red Sea project’s first phase.

“It will be a senior debt facility – conventional finance – that’s what we need at this stage. It will come in the not-so-distant future,” he said.

Pagano said they have already built credibility with lending institutions, which he expects will make it easier for them to secure financing.  

According to a Reuters report, Saudi Arabia is planning to raise up to 10 billion riyals ($2.67 billion) next year for Amaala, citing the CEO.

‘Saudi Arabia is changing’

All these projects are part of an ongoing transformation in the Kingdom, primarily driven by its pursuit to diversify income sources away from oil.

The Kingdom identified tourism as one of its key sectors in this diversification, with many infrastructure developments in the pipeline, as well as regulatory changes that make it easier for tourists to visit the previously closed-off Gulf state.

“It is fair to say that Saudi Arabia is changing from a policy perspective, and it’s changing dramatically,” Pagano said.

For the Red Sea destinations, Pagano said they are building a special economic zone that will set a more relaxed regulatory environment.

“It will be conducive to attracting investments, and it is going to allow us to adjust the social norms to make the destinations attractive to foreign visitors,” he said.