NEOM, Qiddiya, and Diriyah among projects attracting UK investor interest

NEOM, Qiddiya, and Diriyah among projects attracting UK investor interest
The UK-Saudi Sustainable Infrastructure Summit in London. SPA
Short Url
Updated 25 June 2024

NEOM, Qiddiya, and Diriyah among projects attracting UK investor interest

NEOM, Qiddiya, and Diriyah among projects attracting UK investor interest

RIYADH: Saudi Arabia has garnered strong interest from British investors in its renewable energy sector and sustainable infrastructure, aligning with its Vision 2030 for green initiatives in environmental projects. 

This came at the UK-Saudi Sustainable Infrastructure Summit in London on June 24, where opportunities within the Kingdom’s top five projects — NEOM, Qiddiya, the Red Sea Project, ROSHN, and Diriyah — were highlighted, the Saudi Press Agency reported.  

These initiatives are part of the Kingdom’s broader commitment to ambitious climate goals, which include reducing carbon emissions by 278 million tonnes annually by 2030 and increasing renewable energy generation capacity by 50 percent. 

Hosted by the Saudi British Business Council in collaboration with the Saudi Chambers of Commerce and City of London Corporation, the summit brought together over 250 leaders from the industry and financial sectors of both countries, along with key representatives from these giga-projects. 

The event also placed a strong emphasis on financing and green technologies in an effort to achieve net-zero emissions. 

Discussions focused on the significance of Saudi-British cooperation in sustainable infrastructure development, advancing toward net-zero emissions, bridging investment gaps, and the role of public-private partnerships.

It also focused on innovative financing models including green bonds and sustainability-linked loans, as well as smart urban planning to achieve sustainability goals and implement large-scale projects using innovative low-carbon technologies.

The Saudi British Business Council, the Saudi British Sports Investment Forum, and the real estate and finance sectors held sector-specific working group meetings after the summit to discuss ambitious plans for developing the sports sector and investment landscape in the Kingdom and the UK.

A high-level delegation from the Kingdom, led by the Federation of Saudi Chambers and the Ministry of Investment, attended the event.

During his participation, the Minister of Investment Khalid Al-Falih discussed in a panel session the strategic partnership between the two countries in sectors of mutual interest and the development of the investment environment since the launch of Saudi Vision 2030.

The summit came at a time when the two nations’ economic relations are expanding, and the UK is Saudi Arabia’s 25th largest commercial partner.

In late 2022, both nations signed an agreement to strengthen their collaboration in green finance as the Kingdom increasingly seeks support for its massively transformative projects.

Kuwait turns to deficit of 1.6 bln dinars in FY 2023/24, finance ministry says

Kuwait turns to deficit of 1.6 bln dinars in FY 2023/24, finance ministry says
Updated 17 sec ago

Kuwait turns to deficit of 1.6 bln dinars in FY 2023/24, finance ministry says

Kuwait turns to deficit of 1.6 bln dinars in FY 2023/24, finance ministry says
  • Kuwait’s oil revenues fell to 21.528 billion dinars in FY 2023/24

KUWAIT CITY: Kuwait registered a deficit of 1.6 billion dinars ($5.23 billion) in fiscal year 2023/24 from a surplus of 6.4 billion dinars in the previous year, its finance ministry said in a statement on Wednesday.
Kuwait’s oil revenues fell to 21.528 billion dinars in FY 2023/24, based on an oil price of $86.36 a barrel. This was a fall in revenue from 26.713 billion dinars in the previous year.
The Gulf state has had to comply with production cuts by the OPEC+ producer group amid lower oil prices this year while making slow progress on diversifying revenue sources compared with its Gulf neighbors.
Expenditures reached 25.206 billion dinars compared to 22.370 billion dinars in the previous year. Kuwait’s fiscal year ends on March 31.
Kuwait holds some of the world’s largest oil reserves and has strong fiscal and external balance sheets, but political and institutional gridlock has hampered investment and reforms aimed at reducing its heavy reliance on oil. 

NEOM projects to receive $27.7m of cement from Al Jouf and Webuild partnership 

NEOM projects to receive $27.7m of cement from Al Jouf and Webuild partnership 
Updated 7 min 39 sec ago

NEOM projects to receive $27.7m of cement from Al Jouf and Webuild partnership 

NEOM projects to receive $27.7m of cement from Al Jouf and Webuild partnership 

RIYADH: NEOM projects are set to receive cement worth SR104 million ($27.7 million) as Saudi Arabia’s Al Jouf Cement Co. partners with Italy’s Webuild SpA. 

The Saudi company has officially entered into an agreement with Webuild SpA, in a deal that involves the sale of cement for various developments.

In a statement released on Tadawul, Al Jouf detailed that the duration of the contract is 41 months from the date of signing and is subject to increased quantities. 

The company expects this agreement to have a positive impact on its financial statements starting from the third quarter of this year and continuing through the end of the contract period. 

The Kingdom’s $500 billion giga-project is at the northern tip of the Red Sea, east of Egypt across the Gulf of Aqaba and south of Jordan. 

NEOM is set to host several projects, including The Line, which is a mirrored structure that stretches 170 kilometers, 500 meters above the sea and 200 meters wide. 

Trojena is also part of NEOM’s regional plan, situated 50 kilometers from the Gulf of Aqaba coast. The mountainous area spans nearly 60 sq. kilometers and features elevations ranging from 1,500 to 2,600 meters. 

Earlier in May, NEOM announced that it will build a new marina and community also on the Gulf of Aqaba called Jaumur. 

The destination will be an exclusive residential community planned around a marina promenade for more than 6,000 residents, and will include 500 marina apartments and around 700 luxury villas.

Earlier this month, NEOM and American hospitality firm Equinox Hotels announced plans to open a resort on the coast of the Gulf of Aqaba as part of the recently unveiled Magna development. 

The luxury destination will feature 12 locations along 120 kilometers of coastline, and will include 15 hotels, 1,600 rooms, and over 2,500 residences. 

Emirates Steel, part of Emirates Steel Arkan Group, one of the largest publicly traded steel and building materials manufacturers in the region, also partnered with Eversendai, a global powerhouse in steel construction, earlier this month to build the NEOM Trojena Ski Village. 

Riyadh office market thriving thanks to regional HQ initiative: Savills 

Riyadh office market thriving thanks to regional HQ initiative: Savills 
Updated 26 min 40 sec ago

Riyadh office market thriving thanks to regional HQ initiative: Savills 

Riyadh office market thriving thanks to regional HQ initiative: Savills 

RIYADH: The office market in Riyadh continued its strong performance in the second quarter of 2024, thanks to government investment incentives attracting international corporations to establish regional headquarters. 

According to the latest Saudi commercial market report by Savills, over 120 international companies relocated their regional headquarters to the Kingdom’s capital in the first quarter of this year, marking a 477 percent increase compared to the same period in 2023. 

The moves came after the Saudi government announced a range of benefits for those companies that set up Middle East bases in Riyadh, including a 30-year exemption from corporate income tax, withholding tax on headquarters activities, as well as discounts and support services. 

Ramzi Darwish, head of Saudi Arabia at Savills Middle East, said: “The Kingdom’s ongoing efforts to diversify its revenue streams and create an attractive business environment are proving successful, as evidenced by the high volume of international inquiries.”   

He added: “In the second quarter of 2024 alone, nearly 70 percent of inquiries received by Savills originated from outside Saudi Arabia, with a significant portion of 50 percent coming specifically from US and UK corporations.” 

This growth in leasing activity was driven by sectors such as technology, media and telecommunications, consulting and engineering, manufacturing, and IT, with 50 percent of transactions involving new entrants, reflecting a positive market sentiment for expansion.  

The British real estate consultancy firm noted that this trend is expected to persist, supported by a strong pipeline of inquiries for the remainder of the year. 

The report also noted that the increase in leasing activity in the capital led to rent prices in North and North-East Riyadh seeing annual increases of 23 percent and 20 percent, respectively. 

These price rises sit alongside foreign direct investment in the city rising 5.6 percent year-on-year in the first quarter of 2024. 

“Limited prime office space in Riyadh, coupled with strong business confidence, has driven Grade A occupancy as high as 98 percent, and rents are increasing steadily, rising by 3 percent quarter-over-quarter in Q2 and a significant increase of 13 percent year-on-year,” said Amjad Saif, head of transactional services at Savills in KSA. 

Savills noted that the city’s expanding market and promising economic prospects were attracting leading businesses from various industries, reinforcing Riyadh’s role as a crucial hub for both regional and global commerce. 

It also noted that prominent companies such as PayerMax and Ernst & Young have established their regional headquarters in the Kingdom.  

Other notable firms include Northern Trust, Bechtel, and PepsiCo, as well as IHG Hotels & Resorts, PwC, and Deloitte. 

Riyadh office market 

The UK-based firm noted that limited prime office space in Riyadh drove Grade A occupancy rates to 98 percent by the end of the second quarter, with these facilities commanding higher rents due to their location, modern infrastructure, and newer construction. 

“This trend reflects a thriving office market in the Saudi capital. Fuelled by robust demand, however, a significant increase in Grade A office space supply is anticipated by the end of 2025. This anticipated influx of over 650,000 square meters of new space is expected to enhance tenant options and mitigate the potential for a supply shortage,” added Savills in the report.  

The analysis noted significant leasing activity in the second quarter of this year, led by engineering and manufacturing companies, followed by legal services and pharmaceutical firms. 

According to Savills, around 60 percent of leasing inquiries were focused on office spaces under 1,000 sq. meters, indicating a rising preference for agile and efficient work environments. 

Non-oil sector  

Savills noted that Saudi Arabia’s non-oil sector emerged as a key economic driver, expanding by 3.4 percent in the first quarter of 2024 compared to the same period last year.  

The firm pointed out that Saudi Arabia’s moderate inflation rate of 1.6 percent in May is a positive indicator for the non-oil business environment.  

Savills, citing data from S&P Global and Riyad Bank, added that the Purchasing Managers' Index remained steady in the expansionary zone at 56.4 in May, marking the 45th consecutive month above the neutral 50 threshold, which signals growth in the Kingdom’s private sector. 

The latest S&P Global report on July 3 revealed that the PMI stabilized at 55, driven by increased demand, higher output levels, and rising employment. 

In that report, Naif Al-Ghaith, chief economist at Riyad Bank, observed that the growth figures for the second quarter suggested a positive outlook for Saudi Arabia’s non-oil GDP, with expectations of growth surpassing 3 percent.  

He noted that the strong performance of non-oil sectors throughout the quarter continued to drive economic growth and diversification efforts in the country. 

In another report released earlier this month, Savills noted that Riyadh is projected to be among the top 15 fastest-growing cities by 2033, driven by a 26 percent population increase and ongoing government infrastructure spending. 

The analysis highlighted that Riyadh is the only non-Asian city on the list, with its growth attributed to a population surge from 5.9 million to 9.2 million over the next decade. 

In May, S&P Global also indicated that the establishment of free economic zones and the regional headquarters program could further boost foreign direct investment inflows into the Kingdom. 

Closing Bell: Saudi main index steady at 12,101.21

Closing Bell: Saudi main index steady at 12,101.21
Updated 24 July 2024

Closing Bell: Saudi main index steady at 12,101.21

Closing Bell: Saudi main index steady at 12,101.21

RIYADH: Saudi Arabia’s Tadawul All Share Index was steady on Wednesday, as it shed just 4.33 points or 0.04 percent to close at 12,101.21.

The total trading turnover of the benchmark index was SR6 billion ($1.60 billion) with 108 of the listed stocks advancing, while another 108 declining. 

The Kingdom’s parallel market showcased a positive performance, as it gained 173.13 points to close at 26,337.13. 

The MSCI Tadawul Index marginally shed 0.05 points to 1,512.89.

Kingdom Holding Co. was the best-performing stock of the day, as the firm’s share price surged by 8.52 percent to SR8.53. 

Other top performers on the main index were the Mediterranean and Gulf Insurance and Reinsurance Co. and Amlak International Finance Co., whose share prices soared by 6.71 percent and 5.36 percent, respectively. 

The worst performer of the day was Arabian Contracting Services Co., as its share price declined by 3.14 percent to SR228.60. 

Share prices of Dr. Soliman Abdel Kader Fakeeh Hospital Co. and Modern Mills for Food Products Co., also slipped by 3.04 percent and 2.62 percent, respectively. 

The positive performance of Nomu was driven by Clean Life Co., with its share price edging up by 12.90 percent to SR105. 

The share prices of Naba Alsaha Medical Services Co. and Qomel Co. – both listed on the parallel market – also increased by 10 percent and 5.76 percent, respectively. 

The worst performer on Nomu was Alhasoob Co., which saw its share price edge down by 5.79 percent to SR50.40. 

Other losers on the parallel market were Marble Design Co. and Al Rashid Industrial Co., whose share prices slipped by 5.56 percent and 4.86 percent, respectively. 

On the announcements front, Sure Global Tech Co. said that it received a contract worth SR13.97 million from Saudi Arabia’s Research, Development and Innovation Authority. 

In a press statement, the company revealed that the scope of the contract includes establishing and developing a national electronic platform for RDIA to manage and support the authority’s research, development and innovation. 

The three-year project aims to create and develop a national e-platform for research management that considers the requirements of digital government, Sure Global Tech added. 

Saudi minister targets food production localization and aviation cooperation during Brazil visit

Saudi minister targets food production localization and aviation cooperation during Brazil visit
Updated 24 July 2024

Saudi minister targets food production localization and aviation cooperation during Brazil visit

Saudi minister targets food production localization and aviation cooperation during Brazil visit

RIYADH: Food production localization and aviation were areas of focus as a senior Saudi minister met with leading Brazilian companies during a trip to the South American country.

The Kingdom’s Minister of Industry and Mineral Resources, Bandar AlKhorayef, held talks with executives from Minerva Foods and JBS, which are prominent in the red meat and poultry sectors. 

The discussions aimed to explore opportunities for localizing food production within Saudi Arabia, transferring knowledge and innovations, and examining the latest advancements in modern manufacturing technologies. 

In a separate meeting, AlKhorayef spoke with a top official from Brazilian aviation company Embraer.

The visits highlight Saudi Arabia’s strategic effort to enhance production capabilities by fostering international partnerships and utilizing advanced manufacturing technologies.

It aligns with the Kingdom’s broader vision to diversify its economy and develop robust, sustainable industries in collaboration with global leaders. 

During the visit to Minerva Foods’ facilities, the minister reviewed advanced manufacturing technologies and discussed potential investment opportunities with company officials, according to the Saudi Press Agency. 

Minerva Foods is a notable player in the Saudi market, where imports, particularly red meat, account for 25 percent of the industry. The Saudi Agricultural and Livestock Investment Co., also known as SALIC, is a major investor in Minerva, holding a 33.8 percent stake. 

SALIC acquired a 19.5 percent stake in 2016 for $210 million, increasing its investment through additional purchases in 2018 and 2020, totaling $204 million. 

The minister also met with Gilberto Tomazoni, CEO of JBS, one of the world’s largest meat and poultry producers known for developing cultivation and production technologies.

JBS is currently establishing a food factory in Jeddah under the Seara brand, with an investment of up to SR500 million ($133.29 million). The facility is expected to start operations by the end of this year, aiming to address the food needs of the Saudi market. 

The partnerships with Minerva Foods and JBS underscore the Kingdom’s dedication to ensuring a stable food supply while attracting foreign investment and expertise to its growing food industry, the SPA report added. 

The minister’s visit to meat production facilities came after he met with leading Brazilian pharma companies to discuss enhancing the localization of vaccines and pharmaceuticals, leveraging the country’s expertise. 

During his discussions, AlKhorayef emphasized the potential for collaboration, highlighting the sector’s importance to Saudi Arabia’s National Industrial Strategy.

AlKhorayef also engaged in discussions with Dimas Douglas Tomlin, executive vice president of strategy and innovation at Brazilian aviation company Embraer.

The dialogue was centered on enhancing cooperation in the sector and localizing its operations within the Kingdom, a release by the ministry said. 

They further explored ways to strengthen collaboration between Saudi Arabia and Embraer, leveraging the Brazilian company’s expertise in aircraft manufacturing, assembly, and maintenance. 

This initiative is part of the Kingdom’s broader efforts to diversify its economy and develop new, advanced industries, aligning with the national strategy that targets 12 sectors, including aviation.

During his visit, the minister toured several of Embraer’s key facilities, including the Ozires Silva, Eugenio de Melo, and Gavião Peixoto sites. 

Interaction between the Kingdom and the Brazilian company began during the Saudi-Brazilian Aviation Forum in 2023. 

In May 2024, Embraer, the Kingdom’s National Industrial Development Center, and business conglomerate AHQ Group signed a memorandum of understanding to enhance the aviation ecosystem in Saudi Arabia. 

This partnership aims to adopt Embraer aircraft, foster technological cooperation, and develop the supply chain.