Expatriates fuel strong demand for housing in Riyadh, Jeddah: report

Expatriates fuel strong demand for housing in Riyadh, Jeddah: report
Rooftop view of Riyadh city districts. Shutterstock
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Updated 1 min 36 sec ago
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Expatriates fuel strong demand for housing in Riyadh, Jeddah: report

Expatriates fuel strong demand for housing in Riyadh, Jeddah: report
  • Visa policy reforms, regulatory changes to attract more foreign investment into the sector

RIYADH: Residential real estate demand in Riyadh and Jeddah is expected to stay robust due to population growth, particularly from expat inflows, according to a new report from S&P Global.

The report forecasts an average annual growth of 3.3 percent in the residential real estate sector from 2024 to 2027.

Rental yields are also maintaining strong growth, with Riyadh seeing a 9 percent year-on-year increase in the first half of 2024, while Jeddah’s rental yields grew by 4 percent. Residential real estate remains a vital part of Saudi Arabia’s economy, contributing about 7 percent to the country’s gross domestic product and supporting a range of sectors.

“We recently revised the outlook on our sovereign ratings for Saudi Arabia to ‘positive’ from ‘stable’ to reflect our view of the country’s strong prospects for non-oil growth and its resilience to volatile oil prices,” the S&P report noted.

The Saudi government’s Vision 2030 aims for a 70 percent homeownership rate by 2030. The homeownership rate stood at 63.7 percent by the end of 2023, according to the Ministry of Municipal and Rural Affairs. The report also highlighted that new residential units and mortgages are expected to rise in 2024 in line with this target.

The report further pointed out that visa policy reforms and regulatory changes could attract more foreign investment into the real estate sector. For example, the introduction of five new products under the Premium Residency program in January 2024 is expected to stimulate demand from foreign buyers, which will contribute to population growth.

“The Saudi government remains committed to the Vision 2030 goals, and we expect these reforms to drive further growth, though domestic factors, like homeownership targets, will remain the key drivers of the real estate market,” the report said.

Despite the optimistic outlook, the report noted challenges for private developers, including rising construction costs and competition for financing from other Vision 2030 projects. Nevertheless, the supply of residential units is steadily increasing. Riyadh now has 1.5 million residential units, following the delivery of 16,200 units in the first half of 2024. In Jeddah, the number of residential units reached 891,000 after 11,300 units were delivered in the same period.

The total number of units in both cities is expected to increase by 16,000 more by the end of 2024. As domestic migration to urban centers continues, demand for residential properties will remain high, leading to a continued shortage of housing in major cities.

In the first half of 2024, Saudi Arabia’s real estate transactions totaled SR127.3 billion ($33.89 billion), with residential properties making up the largest share, according to a separate report by Sakan, a real estate platform.

Sakan’s data revealed that residential properties are the fastest-growing segment in terms of transaction value. The platform also reported a 1.6 percent rise in average prices in the third quarter of 2024. As part of Saudi Arabia’s Vision 2030, the country will need to build more than 1.2 million new housing units to meet its homeownership target.

The demand for high-quality residential properties in key neighborhoods is pushing prices higher, especially for premium apartment spaces. The report noted disparities in prices depending on the neighborhood, unit availability, and property quality.

When it comes to apartment rentals, the report emphasized that the growing expat population is contributing to rent fluctuations. In September 2024, housing rents increased by 11.2 percent, according to the General Authority for Statistics. With high-quality apartments in short supply, tenants often find themselves on waitlists or settling for available units.

Platforms like Sakan are playing a crucial role in the growth of Saudi Arabia’s real estate sector, offering technology-driven solutions to streamline property transactions. The platform connects international buyers to the Saudi market, facilitating a more efficient and transparent real estate process, and helping users make informed decisions.


Global leaders rally for urgent climate action as COP29 opens in Baku

Global leaders rally for urgent climate action as COP29 opens in Baku
Updated 19 min 25 sec ago
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Global leaders rally for urgent climate action as COP29 opens in Baku

Global leaders rally for urgent climate action as COP29 opens in Baku

RIYADH: Global leaders called for increased funding, more carbon markets, and greater international cooperation to address the escalating environmental crisis, as the 29th UN Climate Summit officially began in Azerbaijan.

During the opening day of COP29, Azerbaijan’s Minister of Ecology and Natural Resources, Mukhtar Babayev, took over the presidency from Sultan Ahmed Al-Jaber, who led the previous summit in Dubai last year. 

In his address at the gathering in Baku, Babayev stated that the world is already experiencing the negative impacts of climate change and stressed the importance of international collaboration to combat these challenges. 

He emphasized that the primary goal of the COP29 presidency is to agree on a fair, ambitious, and collective climate finance target that is both effective and sufficient to address the scale and urgency of the crisis. 

“We understand the political and financial constraints. These numbers may sound big, but they are nothing compared to the cost of inaction. These investments pay off,” he said. 

Azerbaijan’s Minister of Ecology and Natural Resources, Mukhtar Babayev. UN Climate Change

Babayev also highlighted the importance of finalizing Article 6 of the 2015 Paris Agreement, which focuses on the development of carbon markets where countries, companies and individuals can trade greenhouse gas emissions credits. 

That deal called for limiting the global temperature increase to 1.5 degrees Celsius above pre-industrial levels. 

“We are determined to get Article 6 in high-integrity carbon markets over the line. Article 6 is long overdue, and it will help protect the planet by matching buyers and sellers efficiently. We need to get this right, and we need to get this done on time, including transitioning away from fossil fuels in a just and orderly manner,” added the COP29 president. 

Babayev also underscored the critical need for increased funding for climate efforts, urging governments, the private sector, and multilateral financial institutions to collaborate to meet the Paris Agreement’s goals. 

“COP29 is a moment of truth for the Paris Agreement. It will test our commitment to the multilateral climate system. We must now demonstrate that we are prepared to meet the goals we have set for ourselves,” said Babayev. 

He added that the world should accelerate investments in the energy sector today to save tomorrow. 

“We are on a road to ruin. But these are not future problems. Climate change is already here. Whether you see it or not, people are suffering in the shadows. They are dying in the dark, and they need more than compassion, more than prayers, and more than paperwork. They are crying out for leadership and action,” said Babayev. 

He added: “No single country or initiative can solve this crisis. This is everyone’s conference. Success or failure will be collective. Azerbaijan can build a bridge, but you all need to walk across it. In fact, we need to start running. Let us move forward in solidarity for a green world.” 

Babayev took over the presidency from the UAE’s Sultan Ahmed Al-Jaber. UN Climate Change

Impacts of climate change 

During the opening ceremony, Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, warned that global warming is affecting every aspect of human life, urging immediate action to mitigate further damage. 

“Do you want your grocery and energy bills to go up even more? Do you want your country to become economically uncompetitive? Do you really want even further global instability, costing precious lives? This crisis is affecting every single individual in the world in one way or another,” said Stiell. 

He added: “We must agree on a new global climate finance goal. If at least two-thirds of the world’s nations cannot afford to cut emissions quickly, then every nation pays a brutal price.” 

Stiell emphasized that climate finance is not charity but a matter of self-interest for every nation, including the wealthiest. 

“We must work harder to reform the global financial system, giving countries the fiscal space they so desperately need,” he said. 

Stiell also highlighted the importance of finalizing Article 6 and said that international carbon markets will play a crucial role in accelerating the energy transition journey. 

“We need to move forward on mitigation, so targets from Dubai are realized. We mustn’t let 1.5 degrees Celsius slip out of reach. And even as temperatures rise, the implementation of our agreements must claw them back,” said Stiell. 

He noted that clean energy infrastructure investments are expected to reach $2 trillion in 2024, nearly double that of fossil fuels. 

Stiell also emphasized the global responsibility to accelerate the transition to renewable energy and ensure that the benefits are shared by all countries and people. 

“We must agree on adaptation indicators. You can’t manage what you don’t measure. We need to know if we’re on a pathway to increasing resilience. We must continue to improve the new mechanisms for financial and technical support on loss and damage,” he said. 

Simon Stiell, executive secretary of the UN Framework Convention on Climate Change. UN Climate Change

Stiell also stressed the importance of transparency to meet climate goals, with Biennial Transparency Reports, due this year, expected to provide a clearer picture of progress in the climate action journey. 

Stiell added: “Now is the time to show that global cooperation is not down for the count. It’s rising to this moment. So, let’s rise together.”

Journey since COP28 

In a brief address during the opening ceremony, Sultan Al-Jaber, president of COP28, reflected on the successes of last year’s summit, noting the momentum gained through climate initiatives launched in Dubai. 

“By delivering the historic, comprehensive, balanced, and groundbreaking UAE Consensus, we accomplished what many thought was impossible. In the months since COP28, the initiatives we launched have gathered real momentum and pace,” said Al-Jaber. 

He added that the world is set to break another record on renewable energy growth this year, adding over 500 gigawatts to global capacity. 

“Fifty-five companies have now joined the oil and gas decarbonization charter, committing to zero methane emissions by 2030, and net zero by or before 2050,” said Al-Jaber. 

During COP28, nearly 200 countries agreed to work toward an ambitious set of global energy objectives as part of the outcome known as the UAE Consensus, pledging to achieve net zero emissions from the global energy sector by 2050. 

The promise also includes transitioning away from fossil fuels, tripling renewable energy capacity, and doubling the rate of energy efficiency improvements by the end of this decade. 

Al-Jaber, who is also the UAE Minister of Industry and Advanced Technology, stressed the importance of cross-sector cooperation to meet climate goals. 

“Earlier this month in Abu Dhabi, we convened experts in climate, energy, artificial intelligence, finance, and investment in an integrated effort to drive low-carbon growth. When sectors work together, we can lift economies and lower emissions. We can make climate and socio-economic progress together at the same time,” he said. 

Al-Jaber also highlighted the progress of Alterra, the world’s largest global catalytic climate fund, which has already allocated $6.5 billion of its $30 billion fund. 

“We have also made progress on the loss and damage fund. $853 million has been pledged to date. The consensus we achieved in Dubai was truly historic. History will judge us by our actions, not by our words,” said Al-Jaber. 

“Let positivity prevail and let it power the process. Let actions speak louder than words. Let results outlast the rhetoric. We are what we do, not what we say,” he added.


Jeddah to host 52 ready-built factories in Saudi-Omani deal

Jeddah to host 52 ready-built factories in Saudi-Omani deal
Updated 11 November 2024
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Jeddah to host 52 ready-built factories in Saudi-Omani deal

Jeddah to host 52 ready-built factories in Saudi-Omani deal

JEDDAH: A total of 52 ready-built factories will be developed in Jeddah through a private sector partnership between the Saudi Authority for Industrial Cities and Technology Zones and Oman’s Osara Corp.

The Saudi organization, known as MODON, signed an agreement with Osara Real Estate Development to construct an industrial park spanning over 45,000 sq. meters in Jeddah’s Second Industrial City.

The project aligns with MODON’s goals of attracting foreign direct investment, fostering strategic partnerships, and supporting the National Industrial Strategy and the Kingdom’s Vision 2030, according to the Saudi Press Agency.

The Kingdom aims to triple its manufacturing gross domestic product by 2030 and raise the value of industrial exports to SR557 billion ($148.34 billion.) The country also aims to raise total investments in the sector to SR1.3 trillion, increase exports of advanced technology products by six times, and generate tens of thousands of high-quality jobs.

The agreement between MODON and the Omani company contributes to empowering entrepreneurs and small and medium-sized enterprises. It represents a significant step toward plans to grant the private sector a larger role in industrial development.

In a statement, MODON highlighted that this agreement coincides with the launch of several innovative services and products aimed at meeting the needs and aspirations of its beneficiaries.

These include a ready-made factory solution that offers access to over 1,500 facilities, as well as the development of the “Motamim” initiative, which allows plants and companies to operate within established sites and receive support for their manufacturing operations.

In 2024, MODON completed several new development projects, including the construction of 20 factories, each spanning 450 sq. meters, and 12 production sites, each covering 900 sq. meters, in the MODON Oasis in Jeddah.

Additionally, 24 facilities, each covering 225 sq. meters, were built in the First Industrial City in Jeddah, along with 20 plants, in the industrial city of Taif.

The developments also included 40 supporting units in the MODON Oasis in Al-Ahsa and 32 ready-made factories with supporting units in the industrial city of Waad Al-Shamal.

The authority emphasized that these projects are in line with its vision to become the preferred destination for investment growth and a leading partner in the industrial and technological ecosystem.

Since its inception in 2001, MODON has developed and managed prominent industrial cities and technology zones in partnership with the public and private sectors.

The total developed land area across 37 industrial cities has grown to over 215 million sq. meters, with the number of industrial establishments reaching about 6,882, making a significant contribution to Saudi Arabia’s economic development.


Mining industry accelerates decarbonization with AI and tech investments: KPMG report

Mining industry accelerates decarbonization with AI and tech investments: KPMG report
Updated 11 November 2024
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Mining industry accelerates decarbonization with AI and tech investments: KPMG report

Mining industry accelerates decarbonization with AI and tech investments: KPMG report
  • 43% identify artificial intelligence as a crucial tool for addressing strategic challenges
  • Companies are increasingly adopting key performance indicators to monitor carbon reduction efforts

RIYADH: The metals and mining sector is accelerating decarbonization, digital transformation, and resilience, with 55 percent of executives prioritizing emissions reduction, according to a new survey report. 

KPMG’s 2024 Global Metals and Mining Outlook revealed that nearly half — 47 percent — of mining executives view technology investments as essential to transforming carbon footprints over the next five years. 

The report, based on insights from over 450 C-level executives, including Bob Wilt, CEO of Saudi Arabia’s national mining company Ma’aden, highlighted shifts driven by sustainability, technological advancements, and supply chain strategies. 

Sammy Ahmed, partner and head of energy and natural resources at KPMG for Europe, Middle East and Africa said: “The metals and mining sector stands at a pivotal crossroads, where decarbonization, geopolitical shifts, and technology, including AI, are reshaping the path to resilience and growth.” 

He added that integrating sustainable practices with operational transformation is essential for achieving a net-zero future, offering a strategic advantage for long-term success. 

The global consulting network revealed that 43 percent identify artificial intelligence as a crucial tool for addressing strategic challenges, including optimizing production and reducing emissions. 

According to Wilt, as quoted in the report: “The time it takes from exploration to commissioning a mine has been cut from sixteen years to nine years, thanks to AI and advanced analytics.” 

The report said that as companies strive to reduce emissions and improve operational efficiency, initiatives like mining machinery electrification and operational redesign are central, offering significant environmental and economic benefits. 

It added that companies are increasingly adopting key performance indicators to monitor carbon reduction efforts, with 43 percent already implementing systems to track carbon footprints. 

“We note that companies are adapting by strengthening compliance through AI and scenario planning,” said Farhan Muhammad, director of metals and mining at KPMG in Saudi Arabia. 

“Global trends, like the use of AI and innovation for decarbonization, sustainability, operational efficiency and business continuity are increasingly being implemented in Saudi Arabia as well, with promising outcomes so far,” he added. 

Despite challenges from price volatility and supply chain disruptions, the report highlighted that the outlook remains optimistic. KPMG noted that 66 percent of executives reported increased output price volatility due to geopolitical instability and surging demand for minerals like lithium, copper, and nickel. 

However, 61 percent expressed confidence in their companies’ growth potential over the next two years, with 58 percent investing in new markets and partnerships to strengthen supply chains. 

The industry is also facing a workforce gap in tech skills, with 47 percent of executives noting shortages in skilled talent. Companies are addressing this through upskilling initiatives and partnerships with educational institutions to attract talent from technology and renewable energy sectors. 

On regulatory issues, 33 percent of executives identify Scope 1 and 2 emissions as significant regulatory risks, while 30 percent cite Scope 3 emissions as an area of concern. AI is increasingly utilized to predict regulatory changes and manage compliance, with 56 percent of executives noting its role in mitigating regulatory risks. 


Oil Updates – prices little changed as US storm threat abates, China stimulus disappoints

Oil Updates – prices little changed as US storm threat abates, China stimulus disappoints
Updated 11 November 2024
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Oil Updates – prices little changed as US storm threat abates, China stimulus disappoints

Oil Updates – prices little changed as US storm threat abates, China stimulus disappoints

SINGAPORE: Oil prices were little changed on Monday as the threat of supply disruptions from a US storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.

Brent crude futures rose 4 cents to $73.91 a barrel by 10:14 a.m. Saudi time, while US West Texas Intermediate crude futures were at $70.31 a barrel, down 7 cents.

Both benchmarks fell more than 2 percent on Friday.

Beijing’s latest stimulus package announced at the National People’s Congress (NPC) standing committee meeting on Friday fell short of market expectations, IG market analyst Tony Sycamore said in a note, adding that its murky forward guidance hinted at only modest stimulus for housing and consumption.

ANZ analysts said the lack of direct fiscal stimulus implied that Chinese policymakers have left room for assessing the impact of policies the next US administration will introduce.

“The market will now shift focus to the Politburo meeting and Central Economic Work Conference in December, where we expect more pro-consumption countercyclical measures to be announced,” they added in a note.

Oil consumption in China, the world’s driver of global demand growth for years, has barely grown in 2024 as its economic growth has slowed, gasoline use has declined with the rapid growth of electric vehicles and liquefied natural gas has replaced diesel as a truck fuel.

Oil prices have also eased after concerns about potential supply disruptions from storm Rafael in the US Gulf of Mexico subsided.

More than a quarter of US Gulf of Mexico oil and 16 percent of natural gas output remained offline on Sunday, according to the offshore energy regulator.

Shell and Chevron each said on Sunday they would start redeploying personnel to their Gulf of Mexico platforms to resume operations.

Looking ahead, there were also concerns that US oil and gas output could rise under the new Trump administration although analysts say 2025’s production forecast is unlikely to change.

“We think producers may think twice about turbo-charging US supply in an era when OPEC+ has already staked out plans to gradually raise production targets over the course of 2025,” Tim Evans of Evans Energy said in a note.

Trump’s election promise of hiking import tariffs to boost the US economy have clouded the global economic outlook although expectations that he could tighten sanctions on OPEC producers Iran and Venezuela and cut oil supply to global markets partly caused oil prices to gain more than 1 percent last week.

Oil markets are also being supported by firm demand from US refiners who are expected to run their plants at above 90 percent of their crude processing capacity on low inventories and improving demand for gasoline and diesel, executives and industry experts said.


ROSHN rebrands as multi-asset developer to lead Saudi real estate transformation

ROSHN rebrands as multi-asset developer to lead Saudi real estate transformation
Updated 10 November 2024
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ROSHN rebrands as multi-asset developer to lead Saudi real estate transformation

ROSHN rebrands as multi-asset developer to lead Saudi real estate transformation

RIYADH: ROSHN, the real estate development company backed by the Public Investment Fund, has announced a bold transformation into a multi-asset real estate developer, the Saudi Press Agency reported.

This move is underscored by the launch of a refreshed corporate identity and a new strategy designed to elevate the quality of life across the Kingdom.

The redefined strategic direction includes an expanded portfolio that spans new categories of real estate assets, marking a significant step in ROSHN’s commitment to reshaping the urban landscape. The company aims to lead the sector’s transformation by creating vibrant, sustainable communities, in alignment with the Kingdom’s Vision 2030 goals.

This move is underscored by the launch of a refreshed corporate identity. SPA

This shift also aligns with Saudi Arabia’s national objective of achieving a 70 percent homeownership rate and enhances ROSHN’s role in driving economic growth and job creation. It marks a key milestone in ROSHN’s leadership within the real estate sector and sets the stage for the development of mixed-use projects and multi-asset destinations across the country.

“ROSHN is proud to be a pioneer in the Kingdom’s real estate development sector, with an ambitious vision to transform the urban landscape,” said Ghada Al-Rumayan, group chief marketing and communications officer. “As ROSHN grows, its vision becomes increasingly clear, reflected in its expansionary approach and commitment to creating distinctive, high-quality destinations that enhance the quality of life across the Kingdom.”

The new identity reflects ROSHN’s dedication to diversifying its real estate offerings. The company is expanding beyond residential communities to include integrated spaces that cater to various segments of society. The goal is to raise living standards and foster economic development, in line with the goals of Vision 2030.

One of the latest projects showcasing this vision is the MARAFY development in Jeddah, which aims to create a pioneering waterway system connecting the Red Sea to Jeddah’s neighborhoods — a first of its kind in the Kingdom.

ROSHN’s current portfolio spans over 200 million sq. m of residential communities, alongside more than 4 million sq. m of commercial spaces, including offices, retail outlets, and tourism facilities. The company also has significant investments in infrastructure, healthcare, education, mosques, and essential services.

Moreover, it is expanding into emerging sectors such as logistics, industrial zones, transportation, entertainment, and fitness centers, reinforcing its broad ambitions and role in diversifying the economy.

By broadening its focus beyond traditional residential developments, ROSHN aims to become a leader in the development of mixed-use, multi-asset communities that contribute to the Kingdom’s long-term growth and prosperity.