Saudi real estate to see $48bn in deals at Cityscape Global 2024
Saudi real estate to see $48bn in deals at Cityscape Global 2024/node/2578265/business-economy
Saudi real estate to see $48bn in deals at Cityscape Global 2024
The event will feature a global investment forum with representatives from 22 countries managing over $3.2 trillion in assets, further solidifying Riyadh’s position as a key capital hub. File
Saudi real estate to see $48bn in deals at Cityscape Global 2024
Updated 15 sec ago
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia’s real estate sector is poised for another major boost with an estimated SR180 billion ($48 billion) in deals expected to be signed at Cityscape Global 2024, taking place in Riyadh from Nov. 11-14.
The event will feature a global investment forum with representatives from 22 countries managing over $3.2 trillion in assets, further solidifying Riyadh’s position as a key capital hub.
Over 30,000 housing units from international developers will also be launched, marking a significant entry into the Saudi market.
Cityscape Global 2024, hosted at Riyadh’s Exhibition and Convention Center in Malham, stands as a major platform for innovation and growth. It underscores Saudi Arabia’s ongoing evolution in real estate, driven by Vision 2030, and its commitment to sustainable development in this vital sector.
The event will host nearly 200 international companies from 50 countries, along with 104 local developers and over 70 global real estate investors. This diverse representation will create a unique platform for shaping the future of real estate in the Kingdom. This year’s edition will span a remarkable 120,000 sq. meters — double the size of the previous edition.
Unprecedented growth
The Saudi real estate sector has seen exceptional growth, with local developers increasing from 48 to 104 in just one year and international developers rising from 54 to 69. This expansion is reflected in the sector’s performance in 2024, with over 280,000 real estate transactions worth more than SR636 billion.
According to the 2024 Global Real Estate Transparency Index, Saudi Arabia’s market ranks among the world’s most improved, raising expectations for Cityscape 2024 and attracting more attention to the Kingdom’s burgeoning real estate opportunities.
Championing the growth
Much of this progress is driven by Saudi Arabia’s Minister of Municipalities and Housing Majid Al-Hogail who has been instrumental in strengthening the sector’s regulatory framework.
Under his leadership, the real estate sector now contributes over 12 percent to Saudi Arabia’s non-oil gross domestic product.
Al-Hogail’s vision includes promoting sustainable urban development, enhancing homeownership rates, and creating smart cities through transformative projects like NEOM and The Line.
Cityscape’s role
Cityscape Global 2024 will showcase Saudi Arabia’s real estate advancements, offering an immersive experience for participants. A holographic map of future cities will allow attendees to explore designs, buildings, and street layouts that represent the Kingdom’s vision for sustainable urban development.
With Al-Hogail’s leadership, Cityscape 2024 is poised to pave the way for an innovative and sustainable real estate future in Saudi Arabia.
A global real estate leader
Cityscape Global 2024 is more than just an event; it is a testament to Saudi Arabia’s rapid development and commitment to excellence. As the Kingdom positions itself as a global leader in real estate, Cityscape will drive the sector to new heights, aligned with the country’s Vision 2030 and its pursuit of creating thriving, sustainable communities.
Saudi Aramco slashes December oil prices for Asian buyers
Updated 06 November 2024
Arab News
RIYADH: Saudi Aramco has reduced its December pricing for Arab Light crude oil for Asian buyers, according to the latest price list released by the state-owned oil giant. The official selling price for Arab Light crude was cut by 50 cents, bringing it to $1.70 per barrel above the regional benchmark.
Similarly, the OSPs for Arab Extra Light and Super Light grades were also reduced by 50 cents per barrel for December, while the OSPs for Arab Medium and Heavy grades saw smaller cuts of 40 cents per barrel.
For North America, Aramco set the December OSP for its flagship Arab Light crude at $3.80 per barrel above the Argus Sour Crude Index. The price differential for Arab Light crude in Western Europe was set at $0.15 above the ICE Brent benchmark, according to an official statement.
Aramco produces five grades of crude oil: Super Light, Arab Light, Arab Extra Light, Arab Medium, and Arab Heavy.
These grades are distinguished by their density: Super Light has a density of more than 40, Arab Extra Light ranges between 36 and 40, Arab Light between 32 and 36, Arab Medium between 29 and 32, and Arab Heavy has a density of less than 29.
The global oil market has been under pressure in recent days, with crude oil prices falling 2.5 percent on Wednesday, ending a five-day winning streak.
This decline was largely attributed to a stronger US dollar, as early reports suggested that Donald Trump is edging closer to securing a second term in the White House. A stronger dollar tends to exert downward pressure on oil and other commodities, making them more expensive for buyers using other currencies.
As a result, Brent crude oil futures dropped to $73.64 per barrel, marking a 2.5 percent decrease from the previous close of $75.53. Similarly, West Texas Intermediate crude futures fell to around $70.22 per barrel, down 2.45 percent from the prior close of $71.99.
Crude oil prices have been subject to significant fluctuations recently, influenced by several key factors. These include OPEC+’s decision to delay its December production plans for the second time, rising tensions in the Middle East, expectations surrounding the upcoming US Federal Reserve policy meeting, and early signs of economic improvement in China, the world’s largest crude importer.
Saudi Tadawul Group eyes M&As to strengthen capital markets: Bloomberg
Updated 06 November 2024
Nadin Hassan
RIYADH: Saudi stock exchange operator Tadawul Group is ramping up plans for mergers and acquisitions to expand the Kingdom’s capital markets amidst a wave of local listings, a senior executive said.
In an interview with Bloomberg in London, Chief Strategy Officer at Saudi Tadawul Group Lee Hodgkinson highlighted that the firm is targeting “digestible” and “strategically relevant acquisitions,” though he did not elaborate on specific targets.
“Mergers and acquisitions will be more integral to our future strategy than in the past,” Hodgkinson said.
The Saudi bourse has seen an influx of companies listing in recent years. This aligns with the Kingdom’s Vision 2030 initiative led by Crown Prince Mohammed bin Salman, which aims to deepen capital markets and reduce reliance on oil.
This year alone, stock sales on Tadawul have raised $15.6 billion, including a significant offering from energy giant Saudi Aramco, Bloomberg reported.
While Hodgkinson did not dismiss potential acquisitions of other stock exchanges down the line, he emphasized that Tadawul’s immediate focus is on diversifying its revenue streams.
Earlier this year, the firm acquired a stake in the Dubai Mercantile Exchange’s parent company for $28.5 million, marking a strategic move into the commodities market.
Looking ahead, Tadawul is exploring various post-trade services, including stock lending and collateral management, alongside developing data services like market indices.
According to Hodgkinson, the team will “exercise a great deal of discipline” on value and possible synergies while evaluating purchase possibilities. He added that M&A activity is intended to support the group’s organic growth strategy.
In August, Bloomberg reported that the Saudi Tadawul Group is intensifying its focus on attracting Asian investors to boost liquidity and trading activity in the region’s largest market.
This push comes as foreign ownership in Saudi capital markets has grown significantly, reaching SR401 billion by the end of 2023, a record high.
Net foreign investments rose by 7.7 percent from the previous year to SR198 billion ($52.77 billion), highlighting the success of the Qualified Foreign Investor program, first introduced in 2015 to open up the Saudi market to global backers.
According to Bloomberg, the Tadawul Group has identified Asia as a key area of focus, aiming to strengthen ties with major Asian markets to diversify the Kingdom’s investment sources.
In the interview, Hodgkinson highlighted that the group sees immense investment potential from markets like China and India.
Tadawul also plans to expand beyond equities into debt markets, commodities, and advanced post-trading services to position itself as a competitive international market player.
Increased mergers, acquisitions, and partnerships are anticipated as the company pursues these goals.
Biban 24 sees deals worth over $4.79bn on opening day
Updated 23 min 32 sec ago
Reem Walid
RIYADH: On the first day of Biban 24, a total of 17 agreements and memorandums of understanding were signed, alongside the launch of financial initiatives valued at more than SR18 billion ($4.79 billion).
These deals and financing portfolios were finalized during the Riyadh event, organized by the General Authority for Small and Medium Enterprises under the theme “A Global Destination for Opportunities.”
The forum aims to empower small and medium enterprises and entrepreneurs by enhancing their access to financial support, ultimately fostering growth in this vital sector of the national economy, as reported by the Saudi Press Agency.
Monsha’at secured cooperation agreements with several leading local financial institutions, including Riyad Bank, which committed to a financing portfolio worth SR3 billion; Al-Rajhi Bank, with SR2.9 billion; and Bank Albilad, offering SR2.85 billion. Additional agreements were signed with Bank AlJazira for SR1 billion, Alinma Bank for SR800 million, and Banque Saudi Fransi for SR700 million.
A deal worth SR25 million was inked with Abdul Latif Jameel Co.
These efforts align with Monsha’at’s ongoing mission to strengthen the growth and competitiveness of SMEs by partnering with key players from various sectors, both locally and internationally.
The overarching goal is to create a conducive environment for growth and build a leading society. As of 2023, SMEs in Saudi Arabia accounted for 28.7 percent of the country’s total gross domestic product, reflecting an 8.7 percent increase from previous figures, and on target for the Vision 2030 target of 35 percent, according to data from Statista.
Several other announcements were made on the first day in the realm of financing and expanding support for projects.
The Saudi National Bank unveiled a financing portfolio of SR3 billion, while Saudi Awwal Bank announced a similiar initiative valued at SR1 billion. The Arab National Bank also announced an SR1.1 billion financing portfolio, along with the launch of an e-commerce financing product worth SR500 million.
Additionally, the Small and Medium Enterprises Bank revealed that it would allocate SR1 billion to finance SMEs in the fourth quarter of 2024.
This funding will be distributed through approved financing models in collaboration with various partner institutions. The bank also introduced a dedicated financing program for SMEs in the education sector, which was developed in partnership with the Ministry of Education and commercial banks.
Monsha’at also concluded several local and international agreements, including an MoU with the Korean Ministry of Small and Medium Enterprises and Korean startups to cooperate in the field of technical classification of SMEs, mainly in the financial technology sector.
Additionally, the program will support innovative projects in cooperation with major companies from both countries. This contributes to the exchange of knowledge and technology between the two sides.
The authority also signed an agreement with the Korean Franchise Association with the goal of facilitating the exchange of 50 brands between the two countries and providing the necessary support for the success of these brands in new markets.
The Korean Minister of Startups and Small and Medium Enterprises, Oh Youngju, said innovation knows no borders and that startups are shaping the world’s landscape, addressing the significant expansion of technology worldwide.
During her participation, she explained that 18 percent of venture capital funding was directed toward artificial intelligence, marking a significant technological shift. She underlined that European startups are leading this change by integrating generative AI into their operations.
The forum further witnessed the signing of a memorandum of cooperation between Monsha’at and SME Corporation Malaysia. The agreement aims to facilitate market access through various programs and services, promote knowledge exchange in innovation and entrepreneurship, and enable the sharing of franchise brands between the two parties.
A memorandum of cooperation was also signed with the Malaysian Franchise Development Co., also known as Bernas, to provide training programs and advisory services, participate in franchise exhibitions between the two countries, and exchange expertise related to studies and mechanisms.
The authority also collaborated with X Development to provide specialized training programs and innovative digital transformation solutions. Through this partnership, Monsha’at aims to equip entrepreneurs and SMEs with essential digital skills and knowledge to enhance their market competitiveness and adapt to rapid changes in the business landscape.
In terms of cooperation with Europe, the authority sealed an additional memorandum of cooperation with the Estonian Business and Innovation Agency to design three specialized educational programs in innovation and entrepreneurship.
This initiative focuses on high school and university students alongside training programs designed to enhance skills and competencies, contributing to accelerating the growth of emerging companies.
With regards to the Arab world, Monsha’at signed an MoU with Bahrain’s Labor Fund or Tamkeen.
The agreement aims to bolster economic, trade, and investment cooperation in the SME sector across both countries. This initiative will focus on collaboration in the Franchise Program, including facilitating the exchange of franchise brands for local and international expansion and fostering talent development and capacity building.
To further enhance investment opportunities, Monsha’at announced 10,000 investment opportunities in cooperation with the “Invest in Saudi” and “Forsa” platforms, in addition to partner entities like the National Center for the Non-Profit Sector and the “Nine Tenths” platform.
The opening day of the forum also saw the announcement that the Kingdom would host the finals of the Middle East and North Africa Startup Competition for the first time — in collaboration with the London Business School. The competition specifically targets startups in the region.
The Federation of Saudi Chambers and the Chambers of Commerce are participating in the forum activities through a pavilion at the exhibition accompanying the conference.
This participation reflects the important economic role played by the institutional bodies of the private sector in enhancing the nation’s position as an international destination for entrepreneurship.
The “Land of Opportunities” is one of the events hosted by Biban this year. It offers opportunities in asset investment, temporary leasing, direct leasing, and purchase, as well as operation, supply, and competition.
It represents an interactive space that encourages exchange and partnerships between investors and entrepreneurs, supported by close cooperation between the public and private sectors.
The Biban Talks Theater witnessed a series of sessions on its first day of the event. The discussions addressed various topics that shed light on AI, building the future, and enabling global capabilities. The theater also witnessed in-depth talks on development strategies for startups and small and medium enterprises, in addition to innovation in growth areas from idea to impact.
The Saudi Premium Residency Center announced that 38 entrepreneurs of 14 different nationalities received “Entrepreneur Residency” status during the Biban 24 Forum. The award aims to empower the sector, attracting and retaining entrepreneurs and investors worldwide to support a diverse, promising economy and enhance the Kingdom’s investment landscape.
Up to 77% of Swedish firms in Saudi plan to boost investment over the next year, official says
Updated 06 November 2024
Reina Takla Reem Walid
RIYADH: Up to 77 percent of Swedish companies operating in Saudi Arabia plan to increase their investment over the next year, according to a top official from the European country.
In an interview with Arab News, Director General of Trade Policy at the Swedish Ministry of Foreign Affairs Camilla Mellander cited a recent study by Business Sweden as she explained the confidence companies from her country have in the Saudi market.
Saudi Arabia is Sweden’s largest trading partner in the Middle East and North Africa region, with a 72 percent rise in commerce since 2018.
Mellander was present in the Kingdom to attend the third meeting of the Saudi-Swedish Joint Committee in her role as a co-chair – an event that came just days after her country’s Minister for Foreign Trade, Benjamin Dousa, met with his Saudi counterpart Minister of Commerce Majid Al-Qasabi at the Future Investment Initiative in Riyadh.
Mellander told Arab News that there are around 60 Swedish companies currently active in Saudi Arabia, and it is 77 percent of these that plan to up their investments in the Kingdom.
“Interestingly, 100 percent of the small or medium sized companies surveyed reported wanting to increase their investment. This really speaks to the confidence of Swedish companies in the Saudi market and the potential they see,” she added.
The director general went on to say that Swedish companies seek to establish long-term partnerships and investments in a demonstration they are reliable partners.
“Some Swedish companies have been active in Saudi Arabia since as early as the 1950s. Around 40 percent of Swedish companies currently working in Saudi Arabia have established or are looking to establish their regional office in the country,” Mellander said.
“The reforms that Saudi Arabia has undertaken as part of Vision 2030 have great potential not only to attract companies but also more foreign direct investments. Today, the EU is the largest source of foreign direct investment in Saudi Arabia – 66 percent in 2022. This also shows the strong confidence of European investors in the Saudi Arabian market and business climate,” she added.
Talking about how the two countries can facilitate SMEs participation in bilateral trade and investment, the director general said: “I am very excited to participate in the BIBAN Forum ... and to personally take stock of the possibilities for cooperation within the field of SMEs.”
She added: “One area with great potential is the collaboration between Swedish incubators and their counterparts here in the Kingdom. Both Sweden and Saudi Arabia share the priority to support our young entrepreneurs. We need to coach them so that they can shepherd their innovations from ideas to commercial success.”
Mellander with the Deputy Governor for International Relations at the Saudi General Authority of Foreign Trade Abdulaziz bin Omar Al-Sakran. SPA
Closer working
Reflecting on areas of growth between the two countries, the director general cited transportation, industrial equipment, health, and technology as key sectors.
Mellander said the meeting of the Saudi-Swedish Joint Committee was an opportunity for the two countries to identify new areas of mutual interest to deepen relations in areas where there are already existing ties.
When it comes to cultural exchange programs and initiatives that contribute to strengthening economic ties between Sweden and Saudi Arabia, Mellander said that scholarships for Swedish students that wish to study in the Kingdom were one of the discussion items during the Joint Committee.
“We are also looking into the possibility for internships at Swedish companies for Saudi students. This adds to the already existing programs, such as for specialist training of doctors provided at some of our university hospitals. I hope that the new initiatives will help to strengthen the economic and people-to-people ties between Sweden and Saudi Arabia,” Mellander said.
With regards to promising investment opportunities for Swedish companies in Saudi Arabia and vice versa, the director general said that firms from her country are well positioned to contribute to sectors of importance to the realization of Vision 2030 and the giga-projects.
“Nearly half of Swedish businesses in Saudi Arabia are currently engaged in at least one giga-project or other core parts of Vision implementation,” Mellander said, flagging up the involvement of firms such as Ericsson, Sandvik and Volvo Trucks.
Swedish ‘optimism’
Mellander stressed that according to the latest global business climate report made by Business Sweden, the Kingdom stands out as one of the markets with the most favorable business climate for firms from her country.
“Swedish companies report a very high optimism when it comes to the Saudi market. The regulatory changes under Vision 2030 have been very positive. As part of our Swedish-Saudi partnership this must also be communicated to Swedish companies which have a lot to offer to Saudi Arabia. Here, formats like the Joint Committee can be very valuable,” she said.
“At the same time, Swedish companies report that one regulatory hurdle for them in Saudi Arabia is the rapid pace of regulatory changes – it is simply difficult to keep up with new legislation. Another challenge is the access to skilled labor,” the director general added.
When it comes to the areas of digital cooperation between the two sides, Mellander noted that Saudi Arabia is well known among Swedish companies for its high speed and connectivity rate.
“One obvious key area for digital cooperation is the continued development of the infrastructure, the backbone of digital communication. Swedish companies are not only at the forefront of 5G technology and the development of 6G, they can also offer new and innovative applications to increase productivity and efficiency. In addition, they invest in R&D here – for instance, Ericsson is cooperating with KAUST (King Abdullah University of Science and Technology) on 6G development,” she said.
During her time in Saudi Arabia, Mellander visited renal care provider Diaverum to learn more about the Kingdom’s healthcare system and possible avenues for collaboration with Swedish firms.
“A large group among them recently took part in the Global Health Exhibition (in Riyadh), including the newly formed healthcare consortium, and I know they had many productive meetings that are now being followed up,” she added.
With regards to financial cooperation, the director general underlined that Sweden has a very strong export credit system with internationally competitive interest rates and flexible conditions.
“They are already working with banks, Saudi and Swedish actors, to support major investments in the Kingdom, and the interest for their solutions is growing rapidly. Therefore, the Swedish Export Credit Agency, EKN, signed a memorandum of understanding for collaboration with Saudi EXIM this year. Next week, the board of the Swedish Export Credit Corporation, SEK, will be visiting Riyadh to learn more,” Mellander said.
Saudi-Swedish Joint Committee
The Saudi-Swedish Joint Committee held its third session in Riyadh from Nov. 4-5. SPA
During the two-day long Saudi-Swedish Joint Committee meeting, delegates agreed to implement 45 initiatives to address challenges and obstacles to bilateral trade in areas including investment, energy and technology, as well as industry, education and health.
Tourism and sports were also discussed, accord to the Saudi Press Agency.
Deputy Governor for International Relations at the Saudi General Authority of Foreign Trade Abdulaziz bin Omar Al-Sakran noted the importance of overcoming obstacles that may hinder the flow of investment and trade between the Kingdom and Sweden.
In 2023, the trade volume between Saudi Arabia and Sweden reached approximately $1.7 billion.
The main exports from the Kingdom included plastics and their products, machinery, and mechanical appliances and parts, while key Swedish imports consisted of iron and steel products as well as pharmaceuticals.
UAE debt capital markets grow 13% in Q3 to reach $294.4bn
Updated 06 November 2024
Nour El-Shaeri
RIYADH: The UAE’s debt capital markets experienced a 13.1 percent year-on-year growth in the third quarter of 2024, reaching a total of $294.4 billion, according to the managing director at Fitch Ratings.
Bashar Al-Natoor, the firm’s global head of Islamic finance, emphasized the UAE’s growing financial landscape and its significant role in the international sukuk market. By the end of third quarter, sukuk accounted for 20 percent of the UAE’s debt capital market, with the remaining portion in bonds.
“The UAE is a pivotal player in the global sukuk market, holding a 6.6 percent share of the global outstanding sukuk,” Al-Natoor noted in an interview with the Emirates News Agency.
This positions the UAE as the fourth-largest sukuk issuer worldwide, behind Malaysia, Saudi Arabia, and Indonesia. Additionally, the UAE has become a major US dollar debt issuer in emerging markets, excluding China, with an 8.9 percent share in the first half of 2024, trailing only Saudi Arabia and Brazil.
The UAE also ranked as the second-largest issuer of environmental, social, and governance bonds and sukuk in emerging markets outside China during the first nine months of the year, second only to Brazil.
Despite the overall market growth, Al-Natoor acknowledged a decline in issuance levels. Sukuk issuance in the UAE totaled $9.9 billion in the first nine months of 2024, reflecting a 13 percent year-on-year decrease. However, this drop was relatively modest compared to the 25 percent decline in bond issuance during the same period.
Al-Natoor highlighted that the government’s recent extension of fee exemptions for ESG bond and sukuk listings could further support sustainable finance initiatives in the country.
Fitch Ratings currently assesses $26.7 billion of UAE sukuk, with 92.5 percent of these instruments rated as investment grade, Al-Natoor disclosed.
This rating distribution indicates a low to moderate credit risk for most UAE sukuk, with financial institutions dominating at a 51 percent share, followed by corporate issuers at 21 percent.
“Investment-grade is usually an indication that the majority of these instruments have relatively low to moderate credit risk,” he explained.
Al-Natoor also emphasized the role of Islamic banks within the UAE’s financial ecosystem, with Islamic financing accounting for 29 percent of the total sector financing as of mid-year.
Islamic financing grew by 5.7 percent in the first half of the year, slightly outpacing the 5.4 percent growth seen in conventional banking. Fitch anticipates that Islamic banks will continue to expand faster than their conventional counterparts in the medium term.
Further illustrating the influence of Islamic finance, Islamic bank investments in Islamic certificates of deposit reached 44 billion dirhams ($11.9 million) by the end of the first half of the year, Al-Natoor said, citing data from the Central Bank of the UAE.
“Islamic banks invest in Islamic CDs as opposed to M-Bills, as Islamic M-Bills have not yet been introduced,” Al-Natoor explained, adding that while Islamic CDs are based on commodity murabaha, they cannot be traded.
Looking ahead, Al-Natoor projects continued expansion in the UAE’s debt capital markets, potentially surpassing $300 billion by the end of the year.
“The UAE’s debt capital markets are experiencing robust growth, driven by a balanced mix of sukuk and bond issuances, high investment-grade ratings, and strategic market positioning in the sukuk market both globally and regionally,” he said.
