‘Private-public partnerships driving investment in Saudi Arabia’s booming real estate market’

Special ‘Private-public partnerships driving investment in Saudi Arabia’s booming real estate market’
Elias Abou Samra, CEO of Rafal Real Estate in discussion with Arab News’s Reina Takla. Supplied
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Updated 10 July 2024

‘Private-public partnerships driving investment in Saudi Arabia’s booming real estate market’

‘Private-public partnerships driving investment in Saudi Arabia’s booming real estate market’

RIYADH: Private-public partnerships have become a cornerstone for attracting substantial investment to Saudi Arabia’s real estate market over the past five years, an expert has told an industry forum.

Amid Saudi Arabia’s drive to bolster the private sector and foster sustainable partnerships for development, the role of PPPs in spurring economic growth and innovation is now more critical than ever, delegates at the 15th Real Estate Development Summit Saudi Arabia - Europe edition were told.

Saudi real estate projects headlined the event held in Palma de Mallorca, Spain and hosted by GBB Venture. This gathering featured over 100 companies and connected decision-makers from major Saudi projects with global suppliers. 

It also showcased the Kingdom’s rapid real estate advancements, driven by ambitious urban developments and substantial infrastructure investments, emphasizing sustainability and innovation.

Speaking at the event, Elias Abou Samra, CEO of Rafal Real Estate, said: “We’ve seen good traction on PPPs. With private-public partnerships, you have guaranteed offtake. So most of the investments that came into the country were based on this.” 

In a panel discussion titled “In Conversation with a Chief Challenger,” Abou Samra introduced a classification system for PPPs in Saudi Arabia – structured and unstructured. 

“It’s a definition that I came up with, but it helps me understand the landscape of opportunities,” he said.

Structured PPPs encompass projects under the National Center for Privatization, which are highly organized and regulated. In contrast, unstructured PPPs involve mega projects like NEOM and Red Sea, characterized by joint ventures between public entities and private investors.

The NCP, is one of the executive programs launched by the Council of Economic and Development Affairs to achieve the objectives of Vision 2030. 

The program seeks to support the development of the national economy, and enhance the role of the private sector as well as strengthen the government’s focus on its legislative and regulatory role and seek to attract local and foreign direct investments.

During the discussion, Abou Samra unveiled a wealth of opportunities awaiting investors in the Saudi real estate market, highlighting the $1.5 trillion figure mentioned in a recent report by the US-based global real estate services company JLL, which details the pipeline for onward projects in the Kingdom.

“It will be good to segment this $1.5 trillion to understand the landscape of opportunities in the market out of the $1.5 trillion,” said Abou Samra. 

“I believe $80 to $90 billion have already been awarded. So that means there’s 15 times growth in terms of projects to be done over the next seven, eight, maybe 10 years,” he added.

The CEO was candid about the challenges faced by mega projects, acknowledging that they require time and often encounter issues. “It’s no secret that these projects can be stretched, but the relevance of these figures is to highlight the scale of opportunities. While the Saudi government may not invest the remaining balance of $1.5 trillion in the near term, there is notable traction from foreign direct investments.”

Regional investors have already shown significant interest, a development Abou Samra viewed as a healthy sign that will drive further foreign direct investment from both Western and Eastern markets.

“(They) understand the intricacies of investing in Saudi Arabia, creating a ripple effect that fosters more substantial international investment,” he explained.

The real estate market in Saudi Arabia is transitioning from traditional infrastructure projects to more sophisticated superstructures and operational activities. This transformation is poised to accelerate, particularly as most infrastructure works are already well underway. Abou Samra emphasized that this progress is promising for industries such as construction, lifestyle, tourism, and interior design.

Several initiatives are currently underway, including the headquarters group, which has seen a growing number of regional HQs moving to Riyadh. 

“As of my last check, 225 companies have relocated their regional headquarters to Riyadh. This demonstrates the leadership’s commitment to interdisciplinary development and value creation,” Abou Samra remarked.

More than 120 international firms received licenses to relocate their regional headquarters to Saudi Arabia during the first quarter of 2024, representing a 477 percent year-on-year increase. 

In its quarterly report, the Kingdom’s Ministry of Investment revealed 127 permits issued in the first three months of the year, underscoring the nation’s attractive and favorable business environment.

Speaking on the demand for residency in Saudi Arabia, the CEO emphasized that it remains robust, driven primarily by local residents and increasingly by expatriates who have made the Kingdom their home.

“I’ve launched the project since the beginning of this year, and almost 15 percent of the buyers are expats that are residents. Some of them have been residing in Saudi for 10 or more years, so they call it home. But until very recently, they were not actually buying a house,” said Rafal’s head.

This demand is primarily from Arabs and Southeast Asians, with potential growth in Western expatriates as community-driven projects like Dirriyah take shape, he explained.

Saudi Arabia launched the premium visa residency option in 2019, aimed to allow eligible foreigners to live in the Kingdom and receive benefits such as exemption from paying expat and dependents fees, visa-free international travel, and the right to own real estate and run a business without requiring a sponsor.

Abou Samra also discussed the burgeoning mortgage industry in Saudi Arabia, which is catching up on lost years of low uptake. The Saudi Real Estate Refinance Co., established by the Minister of Housing, aims to securitize and syndicate mortgage portfolios, creating liquidity in the market.

This initiative is likened to the establishment of Freddie Mac and Fannie Mae in the US, according to the CEO.

Alternative strategies, such as land deals with extended payment terms, are being employed to decouple from debt markets amid anticipated turbulence. “We just won a project that’s a couple billion riyals in value, but we could start with 150 million riyals of equity, and this is without debt,” Abou Samra shared.

He concluded with a call to action for vendors and suppliers, emphasizing the importance of localization in the supply chain. “Localization is key. I know we’re speaking to a crowd that’s mostly vendors and suppliers from all over the world, but my advice would be, find ways to localize your products,” he urged.

The insights provided by Abou Samra underscored the dynamic and evolving nature of the Saudi real estate market, presenting a wealth of opportunities for investors and stakeholders.

Saudi Arabia’s real estate sector is poised for substantial growth, with projections reaching $69.51 billion in 2024 and anticipated to surge to $101.62 billion by 2029. This expansion aligns closely with the Kingdom’s Vision 2030, focusing prominently on housing, tourism, and commercial development.

Chief Operating Officer of Armada Casa, Wassim Hamdanieh. Supplied

Speaking to Arab News on the sidelines of the event Wassim Hamdanieh, chief operating officer of high-end construction material supplier Armada Casa, said his firm plans to establish key partnerships to expand its premium construction materials portfolio.

“With Vision 2030 driving rapid growth, our focus is on meticulous, detail-oriented developments that align with the country’s urban and sustainability goals, positioning us to shape the future of Saudi Arabia’s property landscape with unparalleled quality and innovation,” he said.

In another panel discussion, titled “Setting Saudi Above the Competing Boundaries,” Navdeep Hanjra, vice president of planning and development at the Royal Commission for AlUla, highlighted the vast potential of the region. 

“AlUla spans 22,000 sq. km., nearly the size of Belgium, and boasts stunning landscapes and significant nature reserves. Its master plans showcase its uniqueness and diversity,” she said.

Hanjra elaborated on the five master plans, emphasizing the “Journey Through Time,” which guides visitors from the ancient Nabataean era to Hegra, Saudi Arabia’s first UNESCO World Heritage site. 

The “Path to Prosperity” master plan aims to grow the current population from 44,000 to 122,000, transforming AlUla into a sustainable city that balances tourism and community development. 

Navdeep Hanjra, vice president of planning and development at the Royal Commission for AlUla. Screenshot

The vice president emphasized that 70 percent of AlUla’s land is dedicated to nature reserves, ensuring the preservation and regeneration of its historic landscapes.

In response to whether AlUla would remain a limited tourist destination or open up further, Hanjra explained that a structured framework plan, developed five years ago, guides the region’s development. 

This plan includes clear urban development boundaries, visitor targets, and 12 guiding principles focused on cultural and natural heritage, sustainability, and socio-economic factors. 

These principles aim to support and retain the existing community while promoting sustainable development and re-naturalizing the landscape for future generations.


New SAMA platform Naqd to facilitate easier account access for agencies 

New SAMA platform Naqd to facilitate easier account access for agencies 
Updated 14 July 2024

New SAMA platform Naqd to facilitate easier account access for agencies 

New SAMA platform Naqd to facilitate easier account access for agencies 

RIYADH: A new digital platform will allow government agencies to access their accounts in the Saudi Central Bank easily and conveniently. 

The central bank, also known as SAMA, has announced the launch of Naqd, a platform for government banking services. The service is designed to provide government entities with easy and secure access to their accounts at the central bank and to conduct financial transactions through a trusted digital platform. 

The initiative is part of SAMA’s strategy to offer banking outlets to government entities and support digital transformation. 

The central bank is fostering digitalization across the spectrum with the launch of several initiatives. 

In May, SAMA announced the launch of a new undertaking — “View My Bank Accounts” — for individual bank account holders. The service enhances reliability and reduces the risk of suspicious transactions, unauthorized account use, and impersonation.  

The Naqd platform aims to digitize financial transaction services for government entities, providing a unified and secure platform. 

It facilitates round-the-clock access to account information, account management and real-time monitoring of transactions conducted from and to government accounts. 

The platform is intended to deliver electronic banking services that support government financial transactions, enhance user experience, and increase efficiency and productivity in financial dealings using the latest technologies.

Additionally, it aims to reduce the time required to execute government banking procedures. 

Saudi environment minister launches financial support program to propel fisheries sector

Saudi environment minister launches financial support program to propel fisheries sector
Updated 14 July 2024

Saudi environment minister launches financial support program to propel fisheries sector

Saudi environment minister launches financial support program to propel fisheries sector

RIYADH: Saudi Arabia’s fisheries sector is set to receive a boost thanks to a new direct financial support program launched by the Kingdom’s minister of environment, water and agriculture.

Abdulrahman Al-Fadhli will oversee the financial support for the Reef Saudi program, which aims to open new horizons for the development of the fisheries sector and stimulate the industry, according to a statement. 

The Sustainable Agricultural Rural Development Program, or Reef Saudi, seeks to improve the rural agricultural sector to raise the standard of living of small farmers and rural families, increase efficiency and productivity, and improve lifestyle and food security.

This move falls in line with the objectives of the Kingdom’s Vision 2030, as the program is an important step toward achieving several strategic goals, including strengthening the nation’s local economy.  

It also aligns well with Saudi Arabia’s Ministry of Environment, Water, and Agriculture’s continuous efforts over the past years to boost the fisheries sector, including establishing a national program to protect fish stocks and the industry as a whole, the provision of concessional loans to assist small-scale fishermen with the purchase of boats, and initiatives to modernize ports in the Red Sea and Arabian Gulf.

Moreover, the program requires that fisherman wishing to obtain support must have a fishing license, in either the Saudi artisan category or Saudi sailor category. 

The fisherman should also not be an employee in the public or private sector, be no younger than 18 years old, and be based within the Kingdom during the period, in addition to the duration of each fishing trip being no less than six hours.

Earlier this month, Saudi Arabia highlighted its role in leading and unifying international efforts to develop the fisheries sector during its presidency of a special UN committee dedicated to the industry. 

This came during the conclusion of the 36th session of the body, which was held at the headquarters of the Food and Agriculture Organization in Rome and was chaired by the Kingdom’s permanent representative to the FAO, Mohammed Al-Ghamdi.

During the meeting, Saudi Arabia reviewed its most prominent efforts to promote and develop the fisheries sector and achieve its sustainability during its two-year presidency, the Saudi Press Agency reported at the time.

Closing Bell: Saudi main index rose to close at 11,881

Closing Bell: Saudi main index rose to close at 11,881
Updated 14 July 2024

Closing Bell: Saudi main index rose to close at 11,881

Closing Bell: Saudi main index rose to close at 11,881

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 89.14 points, or 0.76 percent, to close at 11,881.55.

The total trading turnover of the benchmark index was SR6.36 billion ($1.69 billion) as 154 of the stocks advanced, while 68 retreated.  

On the other hand, the Kingdom’s parallel market Nomu slipped 79.18 points, or 0.31 percent, to close at 25,696.86. This comes as 34 of the listed stocks advanced while 36 retreated. 

Meanwhile, the MSCI Tadawul Index gained 15.65 points, or 1.06 percent, to close at 1 1,488.02.

The best-performing stock of the day was Miahona Co. The company’s share price surged 9.96 percent to SR37.00.

Other top performers include MBC Group Co. as well as Al Taiseer Group Talco Industrial Co.

The worst performer was Al-Rajhi Co. for Cooperative Insurance, whose share price dropped by 7.27 percent to SR209.20. 

Other worst performers were Saudi Advanced Industries Co. as well as Arabian Pipes Co.

On the announcements front, ADES Holding Co. has announced that it has amended its existing syndicated facility, securing an additional equivalent to $3 billion, with the majority of existing lenders participating along with new, leading local and regional financial institutions.

According to a Tadawul statement, the new upsized financing is divided into the equivalent of a $2.7 billion standby term tranche to finance the group’s expansion plans and an additional $300 million revolving credit facility tranche to be applied toward the general corporate purposes of the company.

While the financing duration of the standby term tranche is eight and a half years, with a final maturity in December 2032, that of the RCF tranche is eight years, with a final maturity in June 2032. 

The financing entities include Saudi Awwal Bank, Riyadh Bank, Al Rajhi Banking and Investment Corp., and Arab National Bank, as well as the Saudi National Bank, Alinma Bank, Banque Saudi Fransi, and Aljazira Bank. Arab Petroleum Investments Corp. and Commercial Bank of Dubai PSC are also included.

The bourse filing also revealed that the guarantees offered for the financing entail mortgages over offshore rigs, share mortgages or pledges over entities that hold onshore or offshore rigs as applicable, and security over the collection accounts and debt service accrual account. 

They also include assignment of receivables under client contracts, assignment of receivables under insurance contracts in respect of financed rigs as well as promissory notes.

Saudi Arabia and Thailand strengthen economic ties with new investment office in Riyadh

Saudi Arabia and Thailand strengthen economic ties with new investment office in Riyadh
Updated 14 July 2024

Saudi Arabia and Thailand strengthen economic ties with new investment office in Riyadh

Saudi Arabia and Thailand strengthen economic ties with new investment office in Riyadh

RIYADH: Saudi Arabia is set to enhance private sector cooperation with Thailand as the Southeast Asian nation opens its first Board of Investment office in Riyadh, a top official announced. 

On the sidelines of a business forum in the Saudi capital, Minister of Investment Khalid Al-Falih highlighted that this marks Thailand’s inaugural office in the Middle East, encouraging stronger bonds and new investment opportunities in both countries. 

This came as the minister lauded the steady trade relations, that saw business soar to $8.8 billion in 2023, up from $7.5 billion following the nations’ restored ties in 2022. This represents nearly 22 percent of Thailand’s total trade with the Middle East, underscoring a flourishing economic partnership. 



Addressing the business delegation at the Saudi-Thailand Investment Forum, Al-Falih said: “Representative offices from the Kingdom of Saudi Arabia and your country will do a great deal of facilitating private sector to private sector cooperation and allowing us to reach the potential that I mentioned.”  

He added: “I believe it will continue to grow at double digits as it has been the last couple of years. In investment, we’ve also seen growth, although from very small numbers, with FDI (foreign direct investment) stock doubling since 2019 in the Kingdom of Saudi Arabia.”  

The minister added that travel and tourism are returning to previous levels, with close to 200,000 tourists and visitors traveling from Saudi Arabia to Thailand. He also noted that over 30,000 Thai visitors had come to the Kingdom the previous year to experience Saudi Arabia. 

The Thailand BOI office will cover a total of 13 countries in the Middle East, including Bahrain, Qatar, Kuwait, Turkiye, and the UAE. 

The Riyadh headquarters is Thailand BOI’s 17th overseas office, with two additional locations in China and Singapore set to be added soon.  

“We hope investors from Saudi Arabia and the Middle East will consider making Thailand an investment base to expand business in ASEAN (Association of Southeast Asian Nations) and take advantage of Thailand’s membership in the RCEP (Regional Comprehensive Economic Partnership) agreement, the world’s largest free trade area,” said Narit Therdsteerasukdi, secretary-general of the Thailand BOI. 

He added: “We believe there is a strong potential for investment and cooperation in several key sectors, including agriculture, processed food, renewable energy, healthcare and medical services, as well as automotive, especially electric vehicles.” 

Additionally, Al-Falih explained that the Thailand BOI office will boost areas of cooperation between both countries in several areas. 

“Before I do that, let me assure you — and this is not just me, not our Ministry of Investment, not the government, but the entire Saudi Arabia — we are very bullish on Thailand and indeed very impressed with your achievements,” the minister said.  

He continued: “Your GDP (gross domestic product) per capita has tripled in 20 years, while your export structure has evolved significantly into increasingly sophisticated products in the same time frame.” 

Furthermore, the minister recognized Thailand as one of the founding members of ASEAN, a significant economic alliance that holds importance not only in Asia but globally. 

Due to Thailand’s strategic location and economic strength — the second-largest economy in ASEAN with a GDP exceeding half a trillion dollars — it is a crucial partner for Saudi Arabia.  

“Especially as you are bolstered by ASEAN free trade agreements with most major economies, as you outlined to me this morning. These agreements include big economies in East Asia, as well as South Asian economies. Of course, anchored by India,” Al-Faih said. 

The minister stressed common parallels between the two countries, noting they share a “great deal of complementarity.” Thailand has its National Strategy 2037, whereas Saudi Arabia has its Vision 2030. 

“Which naturally leads me to emphasize the energy sector, including its multifaceted branches downstream: biofuels, biochemicals and CCUS (carbon capture utilization and storage), hydrogen, and renewables,” he said. 

Al-Falih added: “This is obviously an area where we share common ambitions, and the Kingdom has unique capability, creating numerous investment opportunities for both countries in terms of supply chain products as well as project development.” 

Saudi Arabia’s demand for agricultural and food processing products is expected to reach over $130 billion by 2030, with a compound annual growth rate of 7.5 percent.  

Meanwhile, Thailand’s agricultural and food processing sectors were robust in 2022, with exports totaling $45 billion. 

“This presents a huge area of complementary that would boost trade and investment as well as enhance food security in both nations,” Al-Falih underscored. 

Moreover, during the event’s opening speech, Thailand’s Minister of Foreign Affairs, Maris Sangiampongsa, underscored the robust private sector collaboration between both countries, noting the success of the International Mega Fair organized by the Thai Chamber of Commerce in Saudi Arabia. 

This event featured over 30 Thai businesses showcasing 1,000 products from 200 brands, significantly boosting Thailand’s presence in Saudi Arabia. 

Looking ahead, Sangiampongsa announced the upcoming International Mega Fair 2024 in Riyadh, scheduled for November. This event aims to promote trade across diverse sectors, such as construction materials, hospitality, and defense technology. 

The minister expressed confidence in Thai investment representatives’ readiness to strengthen cooperation with their Saudi counterparts, building on the momentum of past successes.  

“As both our nations are located strategically at the crossroads of continents, we recognize that connectivity and efficiency are part and parcel of any feasible development strategy,” Sangiampongsa stated. 

He continued: “That is why, as part of our plan, Thailand launched our flagship Landbridge Project, which will connect the Gulf of Thailand with the Andaman Sea and the Indian Ocean. This bold initiative will reduce commuting time and costs by 15 percent.” 

The forum saw the signing of 11 memoranda of understanding between Thai and Saudi companies, covering cooperation in areas including energy, infrastructure, engineering, agriculture, and forestation. 

The event also featured bilateral meetings and discussions between private sector representatives, which reviewed developments in the investment environment in Saudi Arabia and Thailand. 

Additionally, Saudi Assistant Minister of Investment Ibrahim Al-Mubarak met with Therdsteerasukdi to discuss ways of cooperation and developments in the work of the Saudi-Thai Coordination Council. 

Further, a meeting was held between Saad Al-Khalb, CEO of Saudi EXIM, and Senior Executive Vice President of Export-Import Bank of Thailand Benjarong Suwankiri, discussing areas of cooperation aimed at enabling promising investment opportunities. 

In 2023, Thailand’s applications for investment promotion surged to a nine-year peak of 848.3 billion baht (approximately $24 billion), marking a 43 percent increase from the previous year. 

This growth was driven by significant foreign direct investments primarily in five key sectors outlined in the BOI’s new Investment Promotion Strategy: green industries, automotive (including electric vehicles), and semiconductors. Additionally, investments in advanced electronics, digital and creative industries, and international business centers contributed significantly.  

These sectors accounted for more than half of the total investment pledges. Leading sources of investment included China, Japan, Singapore, and the US. 

NWC initiates $150m in projects to enhance water services in Qassim region 

NWC initiates $150m in projects to enhance water services in Qassim region 
Updated 14 July 2024

NWC initiates $150m in projects to enhance water services in Qassim region 

NWC initiates $150m in projects to enhance water services in Qassim region 

RIYADH: Saudi Arabia’s Qassim region is set to see improvements in water services, with the National Water Co. initiating 14 projects valued at over SR561 million ($150 million). 

The state-owned firm announced that its Northern Cluster has initiated the implementation of water and environmental projects across various parts of the region. These initiatives aim to enhance water and wastewater services, improve their quality, and meet the growing demand. 

Saudi Arabia ranks among the world’s largest water consumers. With limited natural resources, the country continues to rely on the construction of desalination facilities to meet its increasing water demands. The Ministry of Environment, Water, and Agriculture has announced several investments in water projects scheduled for the coming years. 

These projects are part of its strategic goals to expand water and environmental services, meet growing demand, and enhance the quality of life and services for the population in line with the Kingdom's Vision 2030. 

The Public Investment Fund-owned company noted that the initiative includes seven projects worth about SR283 million. These include sewerage channels and networks totaling over 329,000 meters and the construction of a lifting station capable of handling 1,350 cubic meters per day. 

Additionally, the company outlined seven water projects valued at over SR278 million. These initiatives involve networks and pipelines spanning more than 833,000 meters and the establishment of a water distribution system for the Al-Mukharram and Umm Hazm well areas. 

On July 10, the company announced that its northern cluster had initiated 12 water and environmental projects across various parts of the Hail region, amounting to over SR531 million in total costs. 

Five of these projects, totaling about SR238 million, will focus on pipelines and networks spanning more than 226,000 meters, alongside the construction of a lifting station capable of handling over 3,900 m3 per day. 

Also, the NWC has commenced seven water projects aimed at supplying regional customers, involving the construction of reservoirs, water pipelines of various diameters, and water pumping stations, totaling more than SR293 million. 

The network lengths exceed 374,000 meters, complemented by 56 operational reservoirs with a combined capacity of 33,500 m3.  

The projects also include three pumping stations with a total capacity exceeding 53,600 m3 per day, along with multiple water tanker filling stations, as reported by the NWC.