Saudi heritage city Diriyah awards $2bn contract for mixed-use district
Saudi heritage city Diriyah awards $2bn contract for mixed-use district/node/2547751/business-economy
Saudi heritage city Diriyah awards $2bn contract for mixed-use district
Ahmed Al Bassam, CEO of El Seif Engineering Contracting, Chuanhai Wei, CEO of China State Construction Engineering Corp., and Diriyah Company Group CEO Jerry Inzerillo signed the contract
Saudi heritage city Diriyah awards $2bn contract for mixed-use district
Updated 01 October 2024
ARAB NEWS
RIYADH: Saudi heritage city Diriyah has awarded its largest single contract to date for the development of a district featuring educational institutions, cultural venues, and a luxury hotel.
The SR7.8 billion ($2 billion) deal was agreed with a joint venture of El Seif Engineering Contracting Co. and China State Construction Engineering Corp., with work on the area in the north of the city due to commence in the third quarter of the year.
Developing historical sites like Diriyah is crucial for Saudi Arabia as the Kingdom aims to diversify its economy by reducing its dependence on oil and focusing more on sectors like tourism.
Upon completion, the project will host 100,000 residents, workers, students, and visitors, offering a diverse range of cultural, entertainment, and retail, as well as hospitality, educational, and residential spaces.
Diriyah Co. Group CEO Jerry Inzerillo said: “This (contract) represents a major step in our accelerating development strategy and commitment to making Diriyah a place for the world to be able to learn, absorb culture, and experience a vibrant and welcoming visitor destination.”
He added: “The size and scale of this joint venture demonstrates the increasing speed and momentum of our plans for building The City of Earth and creating one of the world’s truly remarkable gathering places, and marks a major milestone in our master planning process.”
Moreover, the contract marks the first major implementation of Diriyah Co.’s new delivery partnership procurement strategy. This approach fosters a collaborative environment among Diriyah and its main contractors, small and medium enterprises, manufacturers, and suppliers, ensuring efficient and effective project execution.
Diriyah CEO further mentioned that the agreement with China State Construction Engineering Corp. exemplifies the growing economic ties and constructive business partnerships between Saudi Arabia and China.
Ahmed Al-Bassam, CEO of El Seif Engineering Contracting Co. welcomed the deal by saying: “We are enormously proud to continue our strategic partnership with the Diriyah Co. and to be entrusted with a project of such importance in developing some of the highest profile assets within the Diriyah development area, and indeed across the Kingdom.”
Diriyah is located on the outskirts of Riyadh, the Kingdom’s capital city, and is home to the UNESCO World Heritage Site of At-Turaif, the historic capital of the first Saudi state.
Amidst these developments in the Kingdom’s tourism sector, Inzerillo was appointed as a UN Tourism ambassador in April, joining an elite group including Lionel Messi, Giorgio Armani, and Plácido Domingo.
Saudi Central Bank’s governor highlights global, domestic economic resilience at IMF meeting
Al-Sayari speaks of organization’s critical role
Updated 25 October 2024
Arab News
WASHINGTON DC: Ayman Al-Sayari, the governor of the Saudi Central Bank, emphasized on Friday the resilience of the global economy despite ongoing challenges.
Speaking at the International Monetary and Financial Committee during the IMF and World Bank Group annual meeting, he noted positive signs of growth and a gradual decrease in inflation, but cautioned about rising global sovereign debt, calling for credible fiscal and debt management reforms to sustain financial stability.
Highlights of #SAMA Governor, Mr. Ayman M. Al-Sayari’s Statement to the International Monetary and Financial Committee #IMFC at the #IMF and #WBG annual meetings in Washington DC. pic.twitter.com/d9e4vJ4Sgs
Al-Sayari highlighted the International Monetary Fund’s critical role in fostering consensus and supporting international trade by countering protectionist practices.
He praised the body’s policy advice and technical assistance as essential for countries seeking economic resilience.
Al-Sayari also spoke of the Kingdom’s robust non-oil growth, low inflation, record-low unemployment, and solid banking sector as outcomes of Vision 2030’s economic transformation agenda.
Since the beginning of the COVID-19 pandemic Saudi Arabia has provided over $36 billion in development assistance and contributed more than $200 million to the IMF’s Poverty Reduction and Growth Trust’s Subsidy Account, he added.
He concluded by stressing the importance of multilateral cooperation to tackle rising debt and economic vulnerability in low-income nations, warning that inaction risked a global debt crisis that could destabilize the financial system.
Riyadh’s population to hit 9.6m by 2030, driving demand for 305k new homes: Knight Frank
Updated 25 October 2024
Dayan Abou Tine
RIYADH: Saudi Arabia’s capital Riyadh is poised for significant population growth, with the number of residents projected to rise from 7 million in 2022 to 9.6 million by 2030, according to a new report.
London-based real estate consultancy Knight Frank projects that the city’s population will comprise 4.1 million Saudis and 5.5 million expatriates by the end of the decade, marking a 38 percent increase driven by a compound annual growth rate of 4.1 percent.
This will drive a need for 305,000 additional housing units for Saudi nationals between 2024 and 2034, driven by household formation, increased homeownership, and internal migration from other regions.
The forecast predicts greater growth than envisaged by World Population Review, which in April used UN figures to put Riyadh’s 2030 population at 8.5 million.
The Knight Frank report anticipates a significant rise in the expat population in Riyadh, which on current figures makes up approximately 52.3 percent of the city’s total population.
It projects an increase of 1.85 million expats by 2030, followed by an additional 2.3 million by 2034. As a result, the ratio of Saudi nationals to non-Saudis is expected to decline from 0.92 in 2022 to 0.75 by 2030.
This shift is primarily driven by the rising demand for expat workers needed to support the construction of large-scale developments and manage the new facilities in Riyadh.
Estimating housing demand from this group is challenging due to variations in household sizes, according to Knight Frank, but 77 percent of expats indicated a desire to own their homes in a previous survey conducted by the firm.
Riyadh’s growth is underpinned by Saudi Arabia’s Vision 2030, which aims to diversify the economy and increase global investments. Currently, Riyadh makes up 21.8 percent of the Kingdom’s total population, with 17.8 percent of Saudi nationals living in the capital.
With the Regional Headquarters Program encouraging multinational companies to relocate their regional operations to Saudi Arabia, Riyadh has naturally become the focal point for economic activity.
This initiative, combined with significant infrastructure and urban development projects, is driving both the expatriate and Saudi populations to rise.
Major projects, such as the New Murabba and Diriyah Gate, are further establishing Riyadh as the center of Saudi Arabia’s transformation.
Riyadh is also gearing up for Expo 2030 and World Cup 2034, which will see the construction of eight out of 11 new stadiums. To support this growth, the King Salman International Airport will be established, along with Riyadh Air, connecting the capital to 100 global cities.
According to the Ministry of Investment’s latest report, the capital led foreign direct investment inflows in 2023, attracting SR33 billion — positioning Riyadh as the leading administrative region.
This growth reflects the city’s role as both the Kingdom’s political and economic powerhouse, where investor confidence is bolstered by large-scale developments and strategic government initiatives.
With 62 percent of the population under 30 according to Knight Frank, the city is focused on providing new housing, employment opportunities, and recreational options to meet the demands of its young and rapidly growing demographic.
Riyadh’s workforce to expand by 39 percent by 2034
Knight Frank forecasts the number of working-age Saudi nationals in Riyadh will increase by about 1 million over the next decade, reaching 4.2 million, which corresponds to a compound annual growth rate of 2.8 percent.
If internal migrants relocate to Riyadh for work, this could add another 275,000, resulting in a total workforce growth of 36 percent.
As of the first quarter of 2024, the employment-to-population ratio for working-age Saudi nationals is 54.3 percent, suggesting that around 510,000 new local employees may enter the workforce by 2034.
With an estimated existing workforce of 1.7 million Saudis in the region, overall growth could yield an increase of 16 percent to 23 percent by 2030 and 29 percent to 39 percent by 2034, depending on the scale of internal migration.
During this recent period, new workforce entrants were primarily absorbed by the private sector and government-related entities, while employment in the civil service has remained stable, the report said.
According to latest figures from the World Bank, female labor force participation has reached 34.5 percent, exceeding the Vision 2030 target of 30 percent and prompting a new goal of 40 percent by 2030.
Both government and private sectors are implementing legal reforms and initiatives to empower women, with programs focusing on women’s roles in economic development.
Companies such as Red Sea Global are prioritizing gender diversity, with women occupying significant positions across various departments.
Meeting future demand
Riyadh’s new housing supply comes from four main sources, including the Ministry of Housing, which oversees affordable projects through the National Housing Company and private firms.
There are also government developments led by the Public Investment Fund and Roshn, private sector initiatives from real estate companies, and self-development by families purchasing land for construction.
Currently, about 330,000 housing units have been announced by government-related entities.
The projected demand from Saudi nationals is estimated at 220,000 units from 2024 to 2030 and 305,000 units from 2024 to 2034, suggesting that current construction efforts align with expected housing needs.
Knight Frank reported that significant commercial real estate development is underway in Riyadh to support a projected 32 percent increase in office space and a 24 percent rise in retail space by 2030, driven by an expanding workforce and a growing expat population.
The urgency for new projects across sectors like financial services, transport, storage, and ICT is underscored by tight market conditions.
Riyadh accounts for 30 percent of Saudi Arabia’s financial and business services output and 39 percent of transport, storage, and ICT output, reinforcing its status as a key hub for innovation and economic activity.
Wellness tourism – a rising force in Saudi Arabia’s Vision 2030
Updated 25 October 2024
MANAL AL-BARAKATI
RIYADH: Saudi Arabia is rapidly positioning itself as a global leader in wellness tourism, a sector that promises significant economic returns while aligning with the Kingdom’s Vision 2030.
With the market expected to reach $1.1 trillion by 2025, the Kingdom is strategically focusing on this burgeoning industry to diversify its economy and enhance the quality of life for residents and visitors, a report by Red Sea Global highlighted.
The rise of wellness tourism in Saudi Arabia reflects a broader transformation within the Kingdom as it seeks to establish itself as a premier destination for global travelers seeking health, well-being, and cultural enrichment.
Wellness tourism: A lucrative market
The global wellness industry, currently valued at $5.6 trillion, is projected to grow to $8.5 trillion by 2027.
This growth is being driven by an increasing global focus on fitness and well-being, particularly in the wake of the COVID-19 pandemic, which has heightened awareness around the importance of physical and mental health.
Within this expansive market, wellness tourism alone was valued at $436 billion in 2020 and is expected to grow at an annual rate of 21 percent by 2025.
This rapid growth underscores the significant opportunities that this industry presents for countries such as Saudi Arabia, which are keen to diversify their economies beyond oil.
The Kingdom is harnessing this growth to drive tourism’s contribution to the national GDP, a key objective under Vision 2030, which aims to increase its share of the economy from 3 percent to 10 percent by the end of the decade.
The Kingdom’s focus on wellness tourism is not just about capitalizing on a lucrative market but also about transforming the overall landscape by offering unique, high-quality experiences that cater to this growing global demand.
Speaking to Arab News, Fahad Mushayt, CEO of the Saudi Tourism Investment Co., also known as ASFAR, emphasized the economic potential of this sector, saying: “International wellness tourists spend, on average, 35 percent more than traditional leisure travelers. This is a market segment that we cannot afford to ignore as we aim to welcome over 150 million visitors by 2030.”
This higher spending is crucial for driving the Kingdom’s tourism revenues, particularly as it seeks to attract high-spending international visitors who are increasingly looking for destinations that offer more than just relaxation. Travelers are seeking comprehensive wellness experiences that combine physical, mental, and spiritual well-being.
Economic impact and Vision 2030
The substantial investments in wellness tourism are a critical component of Vision 2030, which seeks to reduce the Kingdom's reliance on oil.
The growth of wellness tourism is expected to play a pivotal role in increasing the broader sector’s contribution to non-oil GDP, thus supporting broader reforms that are designed to make the Kingdom more resilient in the face of global economic fluctuations.
Shahbaz Tufail, executive vice president of DAR Engineering, told Arab News: “The ongoing development of new entertainment options, as well as aligning value and service propositions to the international travel palette, clearly demonstrates the intent of Vision 2030.
“To appeal to a broader audience, providers must align with global hospitality and travel trends such as ecotourism, wellness, smart hotels, sustainability, and AI.”
The development of luxury wellness resorts, such as those in Riyadh and the Red Sea region, is a key strategy to attract high-end tourists.
Riyadh’s visitation targets, for example, are projected to more than double from 13.6 million in 2022 to 27.4 million by 2030, driven by the expansion of wellness-focused hospitality offerings.
These figures highlight the Kingdom’s ambitious plans to not only increase the number of visitors but also to enhance the quality of their experiences, ensuring that Saudi Arabia becomes a destination of choice for wellness travelers from around the world.
The focus on this form of tourism is also expected to generate significant employment opportunities, particularly in the hospitality, healthcare, and wellness sectors.
As the Kingdom continues to develop its wellness tourism infrastructure, it will require a skilled workforce to meet the demands of this growing industry.
This will not only create jobs but also contribute to the development of a more diverse and knowledge-based economy, in line with the objectives of Vision 2030.
AMAALA is expected to feature nearly 4,000 hotel rooms across 30 hotels, luxury villas, apartments, and estate homes. AMAALA
Meeting global wellness trends
Saudi Arabia is not only responding to global wellness trends but also setting new benchmarks.
The growing demand for retreats that focus on mental health, advanced diagnostic services, and culturally immersive wellness experiences is being met with innovative offerings across the Kingdom.
AMAALA, for instance, integrates traditional healing practices with modern wellness technologies, appealing to travelers seeking authenticity and luxury.
This combination of tradition and innovation is a key strength of Saudi Arabia’s wellness tourism sector, offering visitors unique experiences that cannot be found elsewhere.
AMAALA also offers family-friendly wellness programs, which are becoming increasingly popular as more people look for travel experiences that promote health and well-being for their loved ones as well as themselves.
Men-specific retreats are also gaining traction, reflecting a broader shift towards inclusivity in this market. These offerings ensure that Saudi Arabia remains a competitive destination in the global wellness industry, appealing to diverse demographics and ensuring it becomes a significant driver of the Kingdom’s economic growth.
Strategic developments in wellness tourism
Saudi Arabia’s commitment to wellness tourism is evident in flagship projects like AMAALA and the Red Sea, developed by Red Sea Global, known as RSG.
These projects are part of a broader strategy to position the Kingdom as a global leader in luxury and sustainable tourism.
AMAALA, situated on the northwest coast, is set to become the Kingdom’s premier wellness hub, focusing on luxury and sustainability.
By 2040, the project aims to deliver a 30 percent net conservation benefit to local ecosystems, showcasing its commitment to environmental stewardship. This commitment to sustainability is a key differentiator for Saudi Arabia’s wellness tourism sector, setting it apart from other global destinations.
The economic impact of these projects is significant. With 79 hotels planned across the Red Sea and AMAALA, these destinations are projected to contribute SR33 billion ($8.79 billion) annually to the Kingdom’s economy upon completion.
Covering a combined area of more than 32,000 sq. km, these projects are not only about luxury but also about sustainability.
The Red Sea destination is entirely off-grid, powered by 760,000 solar panels, and the project is scheduled for full completion by 2030.
The scale of these developments reflects the Kingdom’s broader vision to lead in sustainable tourism, setting new benchmarks in environmental responsibility while attracting an international audience.
As the global wellness tourism sector continues to grow, Saudi Arabia is well-placed to capitalize on this trend, driving economic growth, creating jobs, and enhancing the quality of life for its citizens and visitors alike.
ISLAMABAD: Pakistan’s Minister for Industries and Production Rana Tanveer Hussain met with Saudi Arabia’s Governor of Small and Medium Enterprises General Authority Sami bin Ibrahim Al-Husseini on Thursday agreed to enhance cooperation between the two countries in the SME sector.
Hussain departed for the Kingdom this week to attend the two-day UN Multilateral Industrial Policy Forum being held in Riyadh from Oct. 23-24.
The Pakistani minister engaged with international delegates to discuss strategies for enhancing industrial growth and sustainable practices during his visit. On Thursday, he met Saudi Arabia’s governor for small and medium enterprises general in Riyadh, Pakistan’s ministry of industries and production said.
“Both sides discussed matters of mutual interest,” the statement said. “Cooperation among small and medium enterprises will be increased.”
The ministry said both sides also agreed to increase the number of visits by business professionals to their countries.
Pakistan has been seeking to strengthen trade and investment ties, particularly with the Kingdom, whose leadership reaffirmed its commitment this year to expedite a $5 billion investment package for the South Asian country.
Oil Updates – crude heads for weekly gain as Middle East tensions keep market on edge
Updated 25 October 2024
Reuters
SINGAPORE: Oil prices nudged higher on Friday and are on track for a weekly gain of more than 1 percent, as tensions in the world’s top oil-producing region, the Middle East, and a restart in Gaza ceasefire talks in the coming days kept traders on edge.
Brent crude futures climbed 18 cents, or 0.2 percent, to $74.56 a barrel by 6:42 a.m. Saudi time while US West Texas Intermediate crude was at $70.34 a barrel, up 15 cents, or 0.2 percent.
“We remain of the view that the right price for crude oil currently is around $70 where it is now, as we await fresh price drivers, including the outcome of China’s NPC Standing Committee meeting as well as Israel’s response to Iran’s October 1 missile attack,” IG market analyst Tony Sycamore said in a note, referring to WTI prices.
Both benchmarks settled down 58 cents a barrel in the previous session after prices fluctuated against expectations of heightened or reduced tensions in the Middle East.
Oil traders are waiting for Israel’s response to a missile attack by Iran on Oct. 1 that may involve hitting Tehran’s oil infrastructure and disrupt supplies, although reports said Israel would strike Iranian military, not nuclear or oil, targets.
US and Israeli officials are set to restart talks for a ceasefire and the release of hostages in Gaza in the coming days. Previous attempts to reach a deal have failed.
US Secretary of State Antony Blinken said on Thursday that Washington does not want a protracted Israeli campaign in Lebanon, while France has called for a ceasefire and focus on diplomacy.
Ceasefire talks have a small net negative impact on oil prices, Sycamore said, adding the focus is more on the conflict in Lebanon and Israel’s potential response to Iran.
Investors are also eyeing more clarity on Beijing’s stimulus policies, although analysts do not expect such measures to provide a major boost to oil demand from China, the world’s No. 2 consumer.
Goldman Sachs on Thursday left its oil, natural gas, and coal price forecasts unchanged, estimating Chinese stimulus boosts to energy prices that are modest relative to bigger drivers such as oil supply from the Middle East and winter weather for natural gas.
