KSA records 21% growth in residential real estate transactions in Q2: CBRE

The average apartment prices, on a per square meter basis, across the Kingdom have increased by 6.2 percent in the year to the second quarter of 2022. 
The average apartment prices, on a per square meter basis, across the Kingdom have increased by 6.2 percent in the year to the second quarter of 2022. 
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Updated 25 August 2022

KSA records 21% growth in residential real estate transactions in Q2: CBRE

KSA records 21% growth in residential real estate transactions in Q2: CBRE

RIYADH: Saudi Arabia recorded SR36 billion ($9.58 billion) worth of transactions in the residential real estate sector in the second quarter of 2022, recording a 21.4 percent increase over the same period last year, the latest market report by the global real estate adviser CBRE revealed.

While the volumes of residential transactions fell by 19.9 percent to over 44,000 deals in the second quarter when compared to last year, the Kingdom saw the overall value of translations increase due to a spike in apartment prices.  

The average apartment prices, on a per square meter basis, across the Kingdom have increased by 6.2 percent in the year to the second quarter of 2022. 

 This was led by Saudi city Alkhobar which recorded a growth of 11.3 percent in apartment prices, followed by  Jeddah and Riyadh with a spike of 5 percent and 4.2 percent, respectively, in prices in the second quarter. 

However, aside from Alkhobar, all major cities registered a sharp decline in the annual rate of price growth in the second quarter of 2022, compared to the quarter earlier, revealed CBRE’s Saudi Arabia Real Estate Market Review Q2 2022 report. 

 In line with the national trend, all the major cities saw a fall in the number of residential transactions in the year to the second quarter, with the Kingdom’s capital leading the chart with over a 33 percent fall compared to a year earlier. Jeddah and Dammam followed suit with a drop of 6.2 percent and 3.4 percent respectively.

 While Saudi Arabia’s economy has gone from strength to strength recently, analysts at CBRE said the Kingdom’s real estate market performance remains “fragmented” on a city and asset class level. 

 “Given the scale of the change that the Kingdom is undergoing across all asset classes, this is to be expected,” said Taimur Khan, head of research – MENA at CBRE. 

 However, he said their long-term outlook on Saudi Arabia’s real estate sector remains “optimistic,” despite some of the short-run challenges.

Office sector

The CBRE report said visitation to the workplace in Saudi Arabia remains above its pre-pandemic baseline and now sits 19.3 percent above the baseline. 

But, the capital city Riyadh continues to remain at the center of commercial activities, where demand continues to significantly outstrip supply, it said. 

Riyadh has had limited new supply over the years, resulting in average rental prices and occupancy levels staying on the higher side. According to the CBRE report, Riyadh saw occupancy levels rising over the last quarter by 0.7 percentage points to reach 98.1 percent on average in the second quarter of 2022.

“Constrained supply levels have also continued to support growth in rental rates, where in the year to the second quarter of 2022, average Grade A and Grade B rents increased by 3.9 percent and 4.2 percent respectively,” the CBRE said in the report. 

In Jeddah, with the Grade A segment of the market being landlord-favored, it said average rents have increased by 2.4 percent in the 12 months to June 2022. 

Hospitality sector

Amid a massive push to develop the country's tourism and hospitality sectors, Saudi Arabia saw all the key performance indicators of hotels improving in the second quarter, with the average occupancy rate in the year to date to June 2022 increasing by 19 percentage points. 

This helped hotels improve their average daily rates, which increased by 13.5 percent, resulting in their revenue per available room seeing massive growth of  72.8 percent over the same period last year, according to the CBRE report. 


Saudi Arabia calls on African mining industry to invest in Kingdom’s ‘rich, vast natural resources’

Saudi Arabia calls on African mining industry to invest in Kingdom’s ‘rich, vast natural resources’
Updated 08 February 2023

Saudi Arabia calls on African mining industry to invest in Kingdom’s ‘rich, vast natural resources’

Saudi Arabia calls on African mining industry to invest in Kingdom’s ‘rich, vast natural resources’
  • Khalid Al-Mudayfer, deputy minister for mining affairs, told the African Mining Conference in Cape Town the value of the Kingdom’s mineral wealth is estimated at $1.3 trillion

RIYADH: Saudi Arabia called on leading stakeholders in the mining industry across Africa to work together and benefit from the Kingdom’s rich and vast natural resources, to help support economic growth and social development.

Speaking during the African Mining Conference in Cape Town, South Africa, Khalid Al-Mudayfer, the Saudi deputy minister for mining affairs, said the value of the Kingdom’s mineral wealth is estimated at $1.3 trillion, the Saudi Press Agency reported on Tuesday.

He reviewed investment opportunities offered by the Ministry of Industry and Mineral Resources, along with the infrastructure and legislative capabilities of the Kingdom, which he said positions Saudi Arabia as the leading global destination for investment in the mining sector.

Al-Mudayfer, who inaugurated a meeting organized by the ministry for potential investors, highlighted the great opportunities he said were available in the Kingdom, and its efforts to develop its mining sector.

He spoke about the modernization of the mining investment system, which includes regulatory infrastructure for the sector and a clear, transparent and simple environment for investors, along with the availability of geological data for investors, improvements to basic infrastructure, and incentives for those who invest.

The Saudi delegation at the four-day exhibition included representatives from the Ministry of Investment, the National Industry Development and Logistics Program, the Saudi Geological Survey, and the National Center for Industrial Development.

The Saudi pavilion at the event showcases the Kingdom’s continual efforts to develop its mining sector by facilitating access to geological data and updating regulations and legislation to attract investors, build the foundations for sustainability, and develop a mining sector based on integrated value chains.


LEAP investment workshop uses Lego to encourage entrepreneurial culture change

LEAP investment workshop uses Lego to encourage entrepreneurial culture change
Updated 08 February 2023

LEAP investment workshop uses Lego to encourage entrepreneurial culture change

LEAP investment workshop uses Lego to encourage entrepreneurial culture change
  • David Gram-Hanssen of Diplomatic Rebels underscored importance of innovation and change while anticipating resistance
  • Workshop used Lego building blocks to demonstrate how a more experimental and entrepreneurial culture can be adopted

RIYADH: Interactive investment workshops were featured on the second day of LEAP’s second edition, with the spotlight falling on David Gram-Hanssen, co-founder of Diplomatic Rebels.

His workshop utilized Lego building blocks to help participants focus on the changes they can create in the future as they become diplomatic rebels in their respective industries.

He said: “Future success depends on the ability to explore and experiment. We all need to become even better at adapting to change.

“There’s a perfect storm of change happening right now geopolitically, environmentally, business-wise. Everything seems to be sort of moving, and over time that speed is only going to pick up.”

Diplomatic Rebels was a concept created out of the work of Lego’s radical innovation department, Future Lab.

It turned into a system and a way of thought that helped people navigate the bureaucracy of companies, sparking change in their offices and communities.

Gram-Hanssen, who previously worked at Lego Ventures, said companies needed to adopt this entrepreneurial culture.

He added: “At Lego we started saying as a mantra, radical is normal. It means that radical change and radical innovation is the new normal.

“We constantly have to move along and experiment and explore what is happening out there.”

He discussed what it means to be a diplomatic rebel, sparking innovation and positive change while anticipating resistance.

He said: “One of the things at Lego that we understood over time was when you’re working with radical innovation and trying to change things, it’s really hard work.

“One aspect to be mindful of is creating the necessary resilience in the teams you are working with.”

He explained that most entrepreneurs feel like they are constantly fighting the immune system of that existing environment.

He added: “They are trying to do something that doesn’t compute in the existing system.”

Gram-Hanssen gave his audience the task of building a Lego model to represent their work today and their vision for the future.

He also explained the concept of a “pretotype,” a predecessor of a prototype, which aims to gather data to aid faster testing, encouraging participants at the session to implement the concept in their daily lives.

He said: “The right question is not so much what is going to change and when, because it’s hard to foresee.

“Maybe the right question to ask is how do we take a lead on this change? What is it? What do we want to see in the world, and how do we put ourselves in front of this change?”

 


Nuclear energy offers ‘a golden opportunity’ to build a clean world

Nuclear energy offers ‘a golden opportunity’ to build a clean world
Updated 07 February 2023

Nuclear energy offers ‘a golden opportunity’ to build a clean world

Nuclear energy offers ‘a golden opportunity’ to build a clean world

RIYADH: Being a cost-effective and low-carbon solution, nuclear energy “offers a golden opportunity” to help build a clean world, according to the director general of the World Nuclear Association.

Sama Bilbao y Leon was speaking as a keynote speaker at the 44th IAEE International Conference in Riyadh on Tuesday. The top official said nuclear energy offers an opportunity to build a cleaner and more equitable world in which everyone has access to “clean, abundant and affordable round-the-clock energy and high quality of life.”

“As a low-carbon energy source, nuclear power can play a very important role, decarbonizing other difficult-to-able sectors,” she said.

The official said nuclear energy is certainly a cost-effective, low-carbon solution and a catalyst for economic development. It is more efficient than other sources when we think of energy transition, she added.

She, however, cautioned saying that much work is needed to deploy nuclear power with determination and speed.

Leon also pointed out that the current energy market is unstable, and there is a need to take a step back and adopt scientific approaches to make the sustainable energy transition a success.

Yousef Al-Ghamdi, executive director of strategic planning at the Saudi Electricity Co. noted that renewable energy will play an important role in energy transition, especially hydrogen energy.

Shihab Elborai, a partner at Strategy& Middle East, underscored the importance of technological advances to meet the challenges of climate change. He said recycling can help mitigate the climate effect and reduce carbon in the environment, therefore countries should invest in efficient technologies to improve the energy sector.

Peter Hartley, the George A. Peterkin Professor of Economics at Rice University, said natural gas is cheaper and a better option and as an energy source is going to stay. He added that nuclear energy is a costly affair.

Ayad Alamri, executive director for business development, at ACWA Power, said that PVC has a key role in clean energy management and distribution as we are aiming at a net-zero future.


Saudi, Hong Kong bourses sign MoU to explore listing opportunities

Saudi, Hong Kong bourses sign MoU to explore listing opportunities
Updated 07 February 2023

Saudi, Hong Kong bourses sign MoU to explore listing opportunities

Saudi, Hong Kong bourses sign MoU to explore listing opportunities

RIYADH: Saudi Tadawul Group Holding Co. has signed a memorandum of understanding with Hong Kong Exchanges and Clearing to work together to explore listing opportunities and collaborate in sectors such as fintech and environmental, social and governance, according to a tweet by the parent company of the Saudi Exchange.

The MoU reflected the HKEX’s “ongoing commitment to driving global connectivity and shaping a successful shared sustainable future,” said Nicolas Aguzin, CEO of the Hong Kong bourse operator.

“This MoU brings us one step closer toward enabling cross listings and other areas of collaboration between Saudi Arabia and Hong Kong,” Tadawul CEO Khalid Al-Hussan was quoted as saying by the Chinese media.

“As we seek to position the Saudi capital market as an investment hub between East and West, we are seeing increased interest from issuers and investors in Asia.”

 

 


Saudi Arabia-China Entrepreneur Association launched at LEAP

Saudi Arabia-China Entrepreneur Association launched at LEAP
Updated 07 February 2023

Saudi Arabia-China Entrepreneur Association launched at LEAP

Saudi Arabia-China Entrepreneur Association launched at LEAP

RIYADH: The Saudi Arabia-China Entrepreneur Association was launched at the LEAP 2023 conference in Riyadh on Tuesday.

The association — comprising over 100 Saudi and Chinese businesses, government entities, nongovernmental organizations, and academic institutions — seeks to boost cooperation between the private sectors on both sides along with bilateral ties at the government level. 

The nonprofit organization is supported by the Saudi Ministry of Communications and Information Technology and the Saudi Federation for Cybersecurity, Programming, and Drones. It will be operated by eWTP Arabia Capital.

“In line with Saudi Arabia’s Vision 2030, SCEA will enable cross-border investments and valuable collaborations,” said Jerry Li, founder and managing partner of eWTPA. 

The organization also plans to promote investment, encourage innovation, and develop social responsibility and public welfare.  

“China is a strategic partner for Saudi Arabia in terms of technology and innovation. Having worked closely with Alibaba and eWTPA for the last three years, I highly appreciate their efforts in contributing to the development of our local digital ecosystem,” said Faisal Al-Khamisi, chairman of the Saudi Federation for Cybersecurity, Programming, and Drones. 

Al-Khamisi added: “This association will take our collaboration to the next level and provide the broader Saudi-China business community with a forum to share valuable experiences.”