Saudi Real Estate Co. to raise $426.4m to finance Qiddiya, Roshan projects

Saudi Real Estate Co. to raise $426.4m to finance Qiddiya, Roshan projects
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Updated 15 September 2021

Saudi Real Estate Co. to raise $426.4m to finance Qiddiya, Roshan projects

Saudi Real Estate Co. to raise $426.4m to finance Qiddiya, Roshan projects

RIYADH: Saudi Real Estate Co. (Al Akaria) plans to raise SR1.6 billion ($426.4 million) via priority rights issue to finance projects and plans including Qiddiya, Roshan and other major projects related to Vision 2030, CEO Ibrahim Al-Alwan confirmed in an interview on Tuesday.

This is a great opportunity to link the expected growth of our performance with the pace of major projects, and thus the need to increase capital, he said.

Al Akaria announced on Tuesday in a filing on Tadawul, it is considering issuing priority rights to finance its future projects, and the company’s board decided on Monday to present the proposal at an extraordinary general assembly.

The board also approved the appointment of NCB Capital as financial adviser.

The aim is to finance and implement Al Akaria’s future plans and projects and expand its various activities, Al-Alwan told Al Arabiya. 

He said the great momentum in the Saudi real estate market provides an opportunity for the oldest real estate company in the Kingdom to keep pace with the growth of Riyadh, which is witnessing a rapid infrastructure expansion.

Al Akaria CEO also pointed out that the company intends to restore and revive some of its previous projects, and build again in distinctive locations in Riyadh. There are many new projects under study, he said.

As residential projects in the Kingdom are focusing on the quality of life, Al Akaria is looking to launch a wide range of quality services in the next phase, part of which will be investment in the office real estate, he added.

Al Akaria chief pointed out that making profits in real estate projects takes between two to three years, due to which companies have to rely on off-plan sales, which has become part of the business fundamentals in the real estate sector, and one of the solutions to early results in a faster way and reduce financial burdens.


Luxury operator Chalhoub opens new retail hub in Riyadh

Luxury operator Chalhoub opens new retail hub in Riyadh
Updated 19 sec ago

Luxury operator Chalhoub opens new retail hub in Riyadh

Luxury operator Chalhoub opens new retail hub in Riyadh
  • The new retail development, called “Concept by MUSE”, will bring in local, regional, and international brands, particularly catering to the Saudi youth

DUBAI: Luxury retail operator Chalhoub Group has launched a new shopping destination at the Riyadh Park in the Saudi capital, in a new sign of recovery in the Kingdom’s retail sector post-pandemic. 

The new retail development, called “Concept by MUSE”, will bring in local, regional, and international brands, particularly catering to the Saudi youth, the group said in a statement.

“The retail landscape in Saudi Arabia has evolved significantly over the last few years, especially as young customers become increasingly discerning and attentive to global shopping trends while staying true to their roots and culture,” David Vercruysse, president of managed companies at Chalhoub, said.

Over 1,200 products will be featured at the mall, including the work of five Saudi designers Noms Life, Proud Angeles, Dania Shinkar, Cones and Rods, and Kaf By Kaf.

It follows an earlier initiative of the group to support local Saudi designers by giving them financial grants to build their own fashion brands.

The Kingdom has announced several efforts to modernize its economy, including boosting its local retail market. 

“This world’s first demonstrates our commitment to the Kingdom’s Vision 2030 and support to the country’s ambitions to make Saudi a world-class retail destination,” Bachar Sabbagh, the Saudi director of Chalhoub, said. 


Apicorp launches first green bond framework

Apicorp launches first green bond framework
Updated 34 min 41 sec ago

Apicorp launches first green bond framework

Apicorp launches first green bond framework
  • The framework will be used to raise green bonds/sukuk for projects aligned with the UN Sustainable Development Goals

DUBAI: The Arab Petroleum Investments Corporation (Apicorp) has launched its first green bond framework.

It follows the recent approval of the OPEC-created financial institution’s environmental, social, and governance (ESG) policy framework, as it aims to develop the sustainable financial market. 

The framework will be used to raise green bonds/sukuk for projects aligned with the UN Sustainable Development Goals - addressing issues in climate mitigation, circular economy, and biodiversity preservation among others. 

It was created in line with the International Capital Market Association’s Green Bond Principles 2021.

“By launching the Green Bond Framework, Apicorp is providing new avenues for investment in projects and ventures that further the development of safe, affordable, and renewable energy sources,” Ahmed Ali Attiga, chief executive officer of Apicorp. 

He said the framework “reflects our deep understanding of the ESG impact of our investments across the energy spectrum and our commitment to setting out new engagement strategies with our stakeholders to spread awareness of their ESG exposure.”

Apircorp earlier said it will allocate $1 billion towards green energy projects and sustainable energy companies over the next two years. 


Dubai's DAMAC Properties receives approval to take firm private

Dubai's DAMAC Properties receives approval to take firm private
Image: Shutterstock
Updated 35 min 27 sec ago

Dubai's DAMAC Properties receives approval to take firm private

Dubai's DAMAC Properties receives approval to take firm private
  • The Dubai real-estate company still plans to offer $595 million for outstanding shares of the company
  • The firm has a market capitalization of over $2 billion

DAMAC Properties, known for its deals with former President Donald Trump said Thursday it had received regulator approval for an effort to take the firm private.


The Dubai real-estate company still plans to offer $595 million for outstanding shares of the company, the firm said in a filing on Dubai Financial Market stock exchange.


It said it would offer an update on the plan in the coming weeks. It earlier announced plans in June for the offer to take the company private, then withdrew them as regulators examined the plan.


The buyout would be through Maple Invest Co. Ltd., a holding company of DAMAC's billionaire founder Hussain Sajwani. Sajwani owns nearly four-fifths of the company through various investment firms.


DAMAC stock traded up Thursday over 3 percent on the news. The firm has a market capitalization of over $2 billion.


DAMAC is known in Dubai for a development that features a Trump-branded golf club surrounded by villas and apartments, making it the only one of its kind in the Middle East that bears the Trump logo.


The company’s partnership with the Trump Organization to manage and run the golf course was struck before Trump’s election as U.S. president.

 


Saudi Arabia’s ‘stc’ becomes one of Moody’s highest rated telecom operators 

Saudi Arabia’s ‘stc’ becomes one of Moody’s highest rated telecom operators 
Updated 44 min 42 sec ago

Saudi Arabia’s ‘stc’ becomes one of Moody’s highest rated telecom operators 

Saudi Arabia’s ‘stc’ becomes one of Moody’s highest rated telecom operators 
  • The telecom company’s BCA was revised from a1 to a2, and Moody’s also affirmed its A1 long-term issuer rating

DUBAI: Bond credit rating firm Moody’s has upgraded the baseline credit assessment (BCA) of Saudi Arabia’s “stc”, saying it has maintained “very strong financial metrics.”

The telecom company’s BCA was revised from a1 to a2, and Moody’s also affirmed its A1 long-term issuer rating. 

“The upgrade reflects stc's leading position in the Saudi telecom sector, which has considerable growth opportunities,” Julied Haddad, a senior analyst at Moody’s, said in a recent report.

The ratings agency factors in financial profile, market dominance, and liquidity in deciding on companies’ BCA. 

According to the report, “stc” was able to maintain a conservative financial profile, as well as maintain strong metrics despite several economic factors, including an oil price crash and the COVID-19 pandemic. 

The company has sustained its debt to EBITDA ratio, and has built a strong balance sheet over the years, Moody’s said in a report.

This has given “stc” a headroom to grow organically through investments, the report explained, as well as develop its footprint outside the Kingdom through acquisitions.

“As of June 2021, stc had SR7.7 billion ($2.1 billion) in unrestricted cash and cash equivalents, in addition to SR2.9 billion ($0.8 billion) of short-term Murabaha and SR3.9 billion ($1.0 billion) in the form of investments in a sukuk issued by the Government of Saudi Arabia, which the company can liquidate, should the need arise,” it added. 

The BCA also looked at the competition within the telecom industry in the Kingdom, where “stc” holds 70 percent of market share. 

“Following the upgrade of stc's BCA to a1, the company is now one of the highest rated telecom operators on a stand-alone basis globally,” the report said.

The new “stc” rating could be affected positively if the sovereign rating of the Kingdom is upgraded, Moody’s said.


PwC Middle East to build largest HQ in Riyadh, creating over 6,000 jobs

PwC Middle East to build largest HQ in Riyadh, creating over 6,000 jobs
Updated 18 min 22 sec ago

PwC Middle East to build largest HQ in Riyadh, creating over 6,000 jobs

PwC Middle East to build largest HQ in Riyadh, creating over 6,000 jobs
  • PwC predicts its Saudi HQ will attract other global firms to the Kingdom
  • Location will be decided in the next two years

RIYADH: PricewaterhouseCoopers (PwC) Middle East will build its largest headquarters in Riyadh, hiring more than 6,000 staff in the region over the next five years

“We will be establishing the regional consulting headquarters in Riyadh, where it will be based in KAFD [King Abdullah Financial District],” Riyadh Al Najjar, KSA country senior partner, told Arab News. 

Al Najjar said the new base would dovetail with the Vision 2030 growth plans across the Kingdom, allowing the professional services group to help clients take advantage of opportunities that arise.

“We wanted to ramp up our presence in Saudi Arabia and show our continued commitment given the massive transformation happening across the government and support the execution of the Vision 2030 as it happens,” he said.

He added the location of the building will be finalized over the next two years.

“I think our presence in Saudi, from an HQ perspective, can attract other global firms to be in Saudi and enhance the business environment,” Al Najjar added.

He also said the firm was encouraged by new Saudi regulations that welcome international firms to the Kingdom.

PwC markets & strategy leader Stephen Anderson also told Arab News that the strength of the Saudi economy as it emerged from the pandemic was encouraging.

He said: “Coming out of the pandemic, the transformation we have seen in Saudi Arabia so far which has been remarkable is only going to accelerate.”

The Kingdom’s second-quarter economic data showed growth of 1.1 percent quarter-on-quarter. The oil sector grew by 2.5 percent quarter-on-quarter on the back of the unwinding of the 1 million barrels per day voluntary output cut that lasted from February to April. 

Pwc’s Al Najjar said the firm was focused on government Giga projects that are key to the Kingdom’s Vision 2030 growth plans.

Major projects in this scheme include the $8 billion Qiddiya Entertainment city, launched in 2018. The 8,400-acre site will include a theme park, water parks, motorsport tracks, cultural events, and holiday homes. 

The government has earmarked tourism as a priority, and PwC is working closely with clients on initiatives around this industry, according to Al Najjar.

Consulting Market

The consulting market size will continue to grow in Saudi Arabia, given the fact that much of the Vision 2030 investment will require global expertise, and people on the ground to help the government achieve its goals, Al Najjar said. 

“The consulting market in the GCC shrank by 12.4 percent to $2.68 billion in 2020 due to the global pandemic, however, it is expected to grow by around 17 percent in 2021,” he said citing The GCC Consulting Market 2021 report in March by Source Global Research.

“The Saudi market in particular fared best in the GCC during the pandemic only contracting by 11 percent in2020 and is expected to grow by 19 percent by the end of 2021,” according to the report. 

Al Najjar added: “There is no doubt that Saudi from a regional perspective, with all of the Giga projects, and all of the transformation that is happening across the sectors, is a huge market for us in the PwC and is a significant one for the Middle East.”

Anderson emphasized the resilience of clients in the Middle East region during the pandemic who quickly adjusted to the health crisis. 

“Many of our projects continued and we received the same delivery remotely as physically,” he said.

Anderson forecasts that growth will even continue beyond 2030 with “the ambition, the amount of change and transformation in place, which will only demand more service.”

“I think the pandemic introduced new strategies that reinforced and accelerated the Vision 2030 plans,” he said.

Anderson added that there are around 1,500 partners and staff based in Saudi Arabia, over 40 percent of whom are Saudi nationals, and the group has plans to significantly boost this ratio.

PwC has operated in Saudi since 1979, and also already has a hundred staff over four offices in Riyadh, Jeddah, Al Khobar and Dhahran and will soon launch an Al Ula office.

PwC New Equation 

PwC Middle East welcomed 122 new graduates to its Saudi Offices on Monday, as part of its regional graduate intake of 326, with the boost in its hiring a result of its new PwC global strategy, The New Equation, the company said in a June 15 filing.

The number of recruits hired in Saudi Arabia represents 37 percent of the total regional intake, with around 90 percent being Saudi Nationals. 

New graduates took part in a virtual induction attended by regional PwC leaders, and will now join the firm’s Middle East units such as consulting, assurance, deals, and tax & legal services, the company said. 

Anderson said: "We have hundreds on the ground in Riyadh, in the office, working on projects, we have got a noticeable presence on the ground and that is giving us confidence around investing and growing and we will be placing more people on the ground over the next 12 months and beyond, with the expectation that it will continue to grow." 

PwC is committed to hiring over 500 new graduates each year, and provides them with training and qualifications.

Al Najjar has been consulting in Saudi for almost 30 years and said PwC is committed to local talent development programmes, such as Hemam, which recruits and develops future Saudi leaders in the firm, he said.

Anderson added that there is great demand for Saudi talent from the public and the private sector. 

He said the firm saw it as its job was to retain the best, but also second to equip talented leaders whether worked in the private or in the public sector.

As part of its New Equation plan, PwC Middle East will also focus on digital, emerging technologies and Environmental, Social, and Governance concerns.

This includes further investment in digital services through strategic acquisitions, emerging technologies, and establishing additional experience centres in the region, and an Environmental, Social, and Governance centre of excellence.

ESG and Digital Experience Centre

Al Najjar said: "From a Saudi perspective, this is absolutely the right time to look into ESG, as a key pillar of Vision 2030 is improving the quality of life.” 

The firm’s Digital Experience Centre will be in Riyadh, according to Anderson. 

The PwC man said: "In these centres we combine our capabilities with the best of our technology from around the world  to provide opportunities to our clients to collaborate, dream and co-create with us.”