‘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
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‘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.

 


Saudi Arabia raises $990m through April sukuk issuance

Saudi Arabia raises $990m through April sukuk issuance
Updated 22 April 2025
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Saudi Arabia raises $990m through April sukuk issuance

Saudi Arabia raises $990m through April sukuk issuance

RIYADH: Saudi Arabia’s National Debt Management Center raised SR3.71 billion ($990 million) through its riyal-denominated sukuk issuance for April, reflecting a 40.5 percent increase compared to the previous month, according to an official statement.

The amount marks a significant rise from March, when the Kingdom secured SR2.64 billion through sukuk. In previous months, Saudi Arabia issued SR3.07 billion in February and SR3.72 billion in January, continuing a trend of strong activity in the domestic debt market.

Sukuk are Shariah-compliant financial instruments similar to bonds, offering investors partial ownership in an issuer’s assets. They are structured to adhere to Islamic finance principles, which prohibit interest payments.

According to the NDMC, the April issuance was divided into four tranches. The first tranche was valued at SR1.31 billion and is set to mature in 2029. The second amounted to SR80 million, maturing in 2032, while the third tranche, worth SR765 million, will expire in 2036. The largest portion, valued at SR1.55 billion, is due in 2039.

The Kingdom’s debt market has seen rapid growth in recent years, drawing increased interest from investors seeking fixed-income instruments amid a global environment of rising interest rates.

Earlier this month, a report by Kuwait Financial Center, known as Markaz, revealed that Saudi Arabia led the Gulf Cooperation Council region in primary debt issuances in the first quarter of the year. The Kingdom raised $31.01 billion from 41 offerings, accounting for 60.2 percent of all issuances across the GCC during that period.

In a separate development, global credit rating agency S&P Global said Saudi Arabia’s expanding non-oil sector and healthy sukuk issuance levels could contribute significantly to the growth of the global Islamic finance industry.

The agency projected global sukuk issuance could reach between $190 billion and $200 billion in 2025, with foreign currency-denominated issuances contributing up to $80 billion, provided market volatility remains contained.

A report published in December by Kamco Invest further projected that Saudi Arabia would account for the largest share of bond maturities in the GCC from 2025 to 2029, with a total of $168 billion expected to mature during that period.


Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals

Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals
Updated 22 April 2025
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Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals

Over 40 Indian firms have established regional HQs in Saudi Arabia, official reveals

RIYADH: More than 40 Indian companies have established headquarters in Saudi Arabia, with additional facilities in the defense sector expected in the near future, according to a top official.   

Abdulaziz Al-Qahtani, chairman of the Saudi-Indian Business Council, made the comments as Indian Prime Minister Narendra Modi arrived in Jeddah on Tuesday for a two-day visit. 

He is expected to meet with Crown Prince and Prime Minister Mohammed bin Salman during the trip.  

Al-Qahtani said the visit aligns with Saudi Arabia’s broader push to localize defense spending, boost technology transfer, and expand domestic investment across sectors that contribute to national gross domestic product.  

In an interview with Al-Eqtisadiah, Al-Qahtani said Saudi investments in India are valued at around $10 billion, including stakes by the Public Investment Fund in major companies such as Reliance Jio Platforms, Reliance Retail, OYO Hotels, and the Health Technology Co. 

“Al-Qahtani pointed out that the Saudi-Indian Business Council is working to encourage Indian investment in Saudi Arabia, identify investment opportunities in India, and transfer and localize technology in various sectors, such as space and defense,” Al-Eqtisadiah reported.   

“It also aims to exchange expertise in education and training, benefit from mutual expertise in tourism and entertainment, and cooperate in the healthcare sector, pharmaceutical and medical supplies industries, and enhance integration in logistics services,” the report added.  

Al-Qahtani added that India has invited Saudi Arabia to invest in its growing defense sector, which has opened up to private investors in recent years.  

Indian firms that have already established regional bases in Saudi Arabia include those working in automobile and bus manufacturing.  

The move by the more than 40 Indian firms comes amid a wave of multinational companies establishing regional bases in the Kingdom. 

Almost 600 international companies have set up bases in Saudi Arabia since 2021, including Northern Trust, IHG Hotels & Resorts, and Deloitte, the Saudi Press Agency reported in March. 

The growth was fueled by the government-backed Riyadh regional headquarters program, which offers incentives such as a 30-year corporate income tax exemption and withholding tax relief, alongside regulatory support for multinationals operating in the Kingdom. 

India remains a key energy partner for the Kingdom, as it imported 14 percent of Saudi Arabia’s crude oil production and 18 percent of its liquefied natural gas exports in the past year.    

Bilateral trade has also expanded in sectors such as chemicals, construction, and contracting, as well as healthcare training, and information technology.   

Total trade between the two countries reached around $42 billion in the financial year 2023-24. Of this, Indian exports to Saudi Arabia accounted for approximately $11 billion, consisting of engineering products, rice, and petroleum derivatives, as well as chemicals, food and medical supplies, and textiles.    

Saudi exports to India totaled SR31 billion ($8.2 billion), including crude oil, liquefied natural gas, fertilizers, chemicals, and plastics.   


Saudi gold investment demand up 9% in 2024 as bar purchases surge 

Saudi gold investment demand up 9% in 2024 as bar purchases surge 
Updated 22 April 2025
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Saudi gold investment demand up 9% in 2024 as bar purchases surge 

Saudi gold investment demand up 9% in 2024 as bar purchases surge 

RIYADH: Saudi Arabia’s demand for gold bars and coins rose 9 percent in 2024 to 15.4 tonnes, reaffirming the Kingdom’s position as the Gulf region’s largest investment market for the precious metal, a new report showed. 

The World Gold Council’s Gold Demand Trends Full Year 2024 report attributed the increase to heightened investor appetite for safe-haven assets amid economic uncertainty, despite a slowdown in jewelry purchases. 

The document highlighted that Saudi Arabia’s performance in the gold market aligns with a broader regional trend, with countries like the UAE and Kuwait also showing strong growth. 

Saudi investors responded to fluctuations in gold prices, taking advantage of opportunities in the market. 

In particular, demand for bars surged, while the sale of coins saw a slight decrease. The report noted that this robust performance was not limited to the first three quarters of 2024 but continued in the final quarter, with a 20 percent year-on-year increase in bar and coin purchases to 4.3 tonnes. 

Despite the strong growth in investment demand, gold jewelry consumption in the Kingdom experienced a decline, falling by 8 percent to 35 tonnes in 2024. 

This decrease reflects the impact of high gold prices, which have limited the purchasing power of consumers. 

The report indicated that the demand for gold jewelry saw a slight recovery in the fourth quarter of 2024, driven by a price dip that prompted buying. 

The World Gold Council also observed a regional trend where gold remained a key asset class for investors, particularly in the face of rising inflation and geopolitical instability. 

As the global gold price reached record highs in 2024, Saudi investors increasingly turned to gold as a hedge against these challenges. 

The UAE also registered an increase in bar and coin demand, rising 15 percent annually to 13.3 tonnes in 2024. Fourth-quarter demand in the UAE climbed to 3.4 tonnes, up from 3.1 tonnes a year earlier. 

However, jewelry consumption in the Emirates declined 13 percent over the year, totaling 34.7 tonnes, reflecting similar affordability challenges seen across the region. 

Looking ahead, the World Gold Council expects the Kingdom’s gold market to remain resilient, supported by strong investor interest in gold and its role as a hedge in uncertain times. 

The report came as gold extended its record run on Tuesday, breaching $3,500 per ounce, as weakness in the dollar, US President Donald Trump’s attacks on the Federal Reserve and trade war fears boosted demand for the safe-haven asset.

Spot gold was up 0.5 percent at $3,440.51 an ounce by 3:21 p.m. Saudi time, after rising as much as 2.2 percent to $3,500.05 earlier in the session. US gold futures climbed 0.9 percent to $3,454.60.


Saudi Arabia posts 66.7% rise in industrial licenses in February

Saudi Arabia posts 66.7% rise in industrial licenses in February
Updated 22 April 2025
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Saudi Arabia posts 66.7% rise in industrial licenses in February

Saudi Arabia posts 66.7% rise in industrial licenses in February

JEDDAH: Saudi Arabia issued 105 new industrial licenses in February, marking a 66.7 percent increase compared to January, supporting the Kingdom’s drive for economic growth and diversification. 

A total of 113 factories also commenced production during the second month of the year, representing a 9.7 percent increase in comparison with the previous month, according to a statement issued by the Ministry of Industry and Mineral Resources.

According to a report from the ministry’s National Industrial and Mining Information Center, the new licenses represent investments exceeding SR1.02 billion ($272 million) and are expected to create 1,504 jobs.

These developments are part of a broader trend in the sector. An official study revealed that 1,346 new industrial permits were issued in the first quarter of 2024, paving the way for over 44,000 new job opportunities and attracting investments surpassing SR50 billion ($13.3 billion). 

They also align with Saudi Arabia’s National Industrial Strategy, unveiled by Crown Prince Mohammed bin Salman in October 2022, which seeks to accelerate sector growth and raise the number of factories across the Kingdom to approximately 36,000 by 2035.

The strategy targets 12 sub-sectors and outlines over 800 investment opportunities, valued at SR1 trillion, with the goal of tripling the nation’s industrial gross domestic product. 

The issuance of permits also correlates with the Kingdom’s National Industrial Development and Logistics Program, launched in 2019, to support the industrial sector and drive sustainable development. 

The ministry added in its statement that factories entering the production phase attracted investments totaling SR900 million and generated 4,114 new jobs, underscoring the continued growth and expansion of the country’s industrial base as these establishments reach full operational capacity. 

Saudi Arabia’s Industrial Production Index recorded a 1.3 percent year-on-year increase in January, driven by sustained growth in manufacturing and waste management, according to the General Authority for Statistics. Monthly, the index remained steady at 103.9, unchanged from December. 

The manufacturing sub-index posted a 4 percent annual rise, supported by a 4.3 percent increase in the production of coke and refined petroleum products, as well as a 4.2 percent uptick in chemicals and chemical products. 

The report, which monitors key industrial indicators, also revealed that investments linked to newly issued industrial licenses reached SR1.197 billion, with the associated projects expected to create more than 2,500 job opportunities across the Kingdom.


IMF projects 3% growth for Saudi economy in 2025

IMF projects 3% growth for Saudi economy in 2025
Updated 22 April 2025
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IMF projects 3% growth for Saudi economy in 2025

IMF projects 3% growth for Saudi economy in 2025

RIYADH: Saudi Arabia’s real gross domestic product is expected to grow by 3 percent in 2025, with further acceleration to 3.7 percent in 2026, according to the latest World Economic Outlook released by the International Monetary Fund.

The forecast marks a downward revision of 0.3 percentage points for 2025 and 0.4 percentage points for 2026 compared to the IMF’s projections issued in January. Despite the slight adjustment, the Kingdom’s anticipated economic performance continues to outpace the global average, which the IMF estimates at 2.8 percent for 2025 and 3 percent for 2026.

“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity,” the IMF noted in its report.

Regionally, Saudi Arabia is expected to outperform several of its Gulf neighbors. The IMF projects Bahrain’s GDP to grow by 2.8 percent in 2025, followed by Qatar at 2.4 percent, Oman at 2.3 percent, and Kuwait at 1.9 percent.

The UAE is forecast to lead the Gulf Cooperation Council with a 4 percent growth rate in 2025 and 5 percent in 2026.

The IMF also predicts that inflation in Saudi Arabia will remain contained, with the average annual rate holding steady at 2.1 percent in 2025 and easing slightly to 2 percent the following year.

In a separate analysis released in December, Mastercard Economics estimated a 3.7 percent expansion for the Saudi economy in 2024, driven largely by growth in non-oil sectors.

Underscoring the Kingdom’s economic momentum, ratings agency S&P Global upgraded Saudi Arabia’s sovereign credit rating to “A+” from “A” in March, citing the country’s ongoing social and economic transformation as a key factor for the stable outlook.

Across the broader Middle East and North Africa region, the IMF anticipates economic growth to average 2.6 percent in 2025, before climbing to 3.4 percent in 2026.

Globally, the US is forecast to record GDP growth of 1.8 percent in 2025 and 1.7 percent in 2026.

Among emerging markets, India is expected to lead with projected growth of 6.2 percent in 2025 and 6.3 percent the following year. China’s economy, meanwhile, is expected to expand by 4 percent annually during the same period.