Diriyah Square details to be unveiled at World Retail Congress
Updated 12 April 2024
Arab News
RIYADH: Plans for a lifestyle hub in Diriyah boasting more than 400 shops and over 100 restaurants and cafes will be unveiled at the World Retail Congress in Paris.
Details around the development will be on show at the event, set to be held from April 16 to 18, Diriyah Co. have announced.
The destination – known as Diriyah Square – is part of a $62.2 billion refurbishment and renovation of the area, which has been designated as one of Saudi Arabia’s giga-projects.
In a statement announcing the presence at the World Retail Congress, Group CEO of Diriyah Co. Jerry Inzerillo said: “Diriyah Square is more than just a shopping destination—it is a symbol of Saudi Arabia's commitment to driving economic growth and fostering creativity and innovation.”
He added: “That is why we are so excited to invite investors and stakeholders from around the world to join us in this exciting journey, and to be a part of shaping the future of retail.
“With its pedestrian-centric design, direct access to Wadi Hanifah, and close vicinity to the breathtaking At-Turaif UNESCO World Heritage Site, the district will be a world-leading lifestyle destination.”
Diriyah is a key component of Saudi Arabia’s Vision 2030 initiative to diversify the Kingdom’s economy away from oil.
Upon completion, it will host 100,000 residents, workers, students, and visitors.
In February, Inzerillo told Arab News that Diriyah Co. is aiming to break ground on 11 new assets by the end of 2024.
Speaking on the sidelines of the Public Investment Fund’s Private Sector Forum held in Riyadh, the CEO said that among the upcoming initiatives is the King Salman Boulevard, which he deemed Saudi Arabia’s version of Paris’ Champs-Elysees.
It will be revealed in December, when the company holds its “Bashayer” event to announce its upcoming initiatives.
The last meeting saw the unveiling of the Diriyah Art Futures museum.
Saudi Arabia’s Vision 2030 driving private equity growth in the GCC
Updated 21 February 2025
Miguel Hadchity
RIYADH: Saudi Arabia has emerged as a transformative force in the private equity landscape within the Gulf Cooperation Council, driven by strategic initiatives, regulatory reforms and the nation’s commitment to Vision 2030.
The Kingdom’s ambitious plans are reshaping the region’s investment ecosystem, setting new benchmarks for growth, diversification and global engagement.
A surge in private equity activity
Private equity investments in Saudi Arabia have witnessed unprecedented growth over the past five years.
The total value of PE transactions surged from $523 million in 2019 to an all-time high of $4 billion in 2023 — seeing a compound annual growth rate of 66 percent during this period, according to a report by MAGNiTT and Saudi Venture Capital Co.
This surge highlighted the Kingdom’s success in creating a favorable environment for local and international investors.
Speaking to Arab News, Arjun Singh, partner and global head of fintech at Arthur D. Little, emphasized Saudi Arabia’s economic resilience amid global challenges: “While the world has grappled with rising prices due to inflation, Saudi Arabia has been able to maintain a relatively low inflation rate — 2.1 percent in 2024 and projected 2.3 percent in 2025 — which makes for a stable investment environment.”
Head of Janus Henderson Investors for Middle East, Africa and Central Asia, Meshal Al-Faras, expanded on this resilience, attributing it to strong domestic liquidity anchored by the Public Investment Fund and family offices, as well as a low debt-to-GDP ratio that ensures continued counter-cyclical investment even during global economic downturns.
He also highlighted Vision 2030’s success in “reducing dependence on oil and fostering resilience to inflationary pressures.”
Key to this growth is the increasing dominance of buyout transactions, which have consistently accounted for about 80 percent of the total PE capital deployed in Saudi Arabia.
Growth equity investments have also gained traction, reflecting the Kingdom’s strategy to support mid-sized companies poised for expansion.
Meshal Al-Faras, head of Janus Henderson Investors for Middle East, Africa and Central Asia. Supplied
Sectoral highlights
The manufacturing sector led the charge in PE investments, capturing 46 percent of the total value between 2019 and 2023. Other prominent sectors included financial services, telecommunications and health care.
Vision 2030 initiatives have encouraged diversification into non-oil sectors, with Singh identifying several opportunities: “While manufacturing and financial services dominate, greater activity is anticipated in food and beverage, tourism, entertainment, health care, technology, renewable energy and real estate.”
Leader of FTI Consulting Middle East and Africa, Vikas Papriwal, noted the opportunities emerging in health care and technology. “The Kingdom is fast becoming a regional tech hub. Advancements in fintech, cybersecurity and in particular AI (artificial intelligence) are supported by key government initiatives,” he said.
Papriwal said that partnerships with leading centers of excellence are positioning Saudi Arabia as a leader in cutting-edge health care and medical research.
Al-Faras echoed these observations, pointing to technology as a key area: “Government initiatives like SDAIA (Saudi Authority for Data and Artificial Intelligence) and fintech success stories such as STC Pay highlight opportunities in AI, fintech and cloud computing.”
He also emphasized the Kingdom’s ambitions in tourism and entertainment: “Giga-projects like NEOM and the Red Sea Development aim to attract 100 million annual visitors by 2030, driving investments in hospitality and eco-tourism.”
Additionally, he highlighted logistics and supply chain opportunities due to Saudi Arabia’s strategic location as a global trade hub.
The top five PE transactions accounted for 76 percent of the total investment during the period between 2019 and 2023, underscoring the concentration of capital in high-value deals.
Driving forces behind the transformation
Saudi Arabia’s transformation into a PE powerhouse is deeply rooted in its economic and regulatory reforms. Vision 2030 has been instrumental in fostering a robust investment ecosystem.
Papriwal highlighted the impact of regulatory enhancements: “The recent updates to Companies Law have made conducting business in Saudi Arabia significantly easier for investors as it improves legal certainty and transparency.”
Al-Faras elaborated on this: “The introduction of new laws such as the New Companies Law, effective January 2023, have transformed Saudi Arabia’s business landscape.”
He added: “They have streamlined corporate structures, for example, the introduction of the Simplified Joint Stock Co. allows flexibility and ease for startups and investors, requiring no minimum capital. They have also improved governance, with enhanced minority shareholder protections and formal recognition of shareholder agreements boosting investor trust.”
The top official explained that the regulations enable full foreign ownership, which enables access to previously restricted sectors such as retail and manufacturing, and encourages international investment.
“Moreover, they provide support for SMEs and Innovation in that provisions like audit exemptions and employee share schemes reduce costs and foster entrepreneurship,” he added.
Additionally, Singh pointed to Saudi Arabia’s improving global rankings: “KSA has steadily been rising in the ‘Ease of doing business’ ranking … and has also gone up the ranks in the Global Innovation Index ranking from 66th in 2020 to 48th in 2023; the GII ranks the world economies according to their innovation capabilities.”
Arjun Singh, partner and global head of fintech at Arthur D. Little. Supplied
The role of the Public Investment Fund
PIF has played a central role in driving private equity growth. Papriwal described it as a catalyst for fulfilling Vision 2030 objectives: “It is at the fulcrum of many government initiatives driving public and private sector growth and employment.”
He added: “PIF has successfully created a number of significant industry platforms allowing cutting-edge technologies to be embedded into these key growth engines.”
Al-Faras highlighted the wealth fund’s pivotal role in de-risking investments: “By acting as an anchor investor, the PIF reduces risks for private and institutional investors. Its investments in technology, renewable energy and tourism projects like NEOM have positioned Saudi Arabia as a hub for innovation.”
He added that PIF’s strategic approach balances domestic development with global diversification, demonstrating how sovereign wealth funds can align investments with national priorities to drive long-term growth.
Comparative advantage in the GCC
While global PE markets grapple with high interest rates and inflation, the GCC region, led by Saudi Arabia, remains resilient.
Saudi Arabia’s PE ecosystem benefits from its particular investor composition, where family offices and sovereign wealth funds dominate compared to institutional investors in Western markets.
Papriwal said: “Saudi private equity investors are also less dependent on global capital markets compared to their counterparts in other regions, which allows for a degree of insulation from international interest rate fluctuations.”
Al-Faras added: “Expanding IPO activity, and the privatization of state-owned assets create liquidity and exit opportunities.”
To attract more international general partners, Singh suggested building trust through greater transparency and aligning regulatory frameworks with global standards.
Local players must focus on protecting intellectual property rights, streamlining dispute resolution and improving ease of doing business through financial incentives, he advised.
Al-Faras concurred, stating: “Another recommendation is to simplify market access: Expand 100 percent foreign ownership to additional industries and digitize business processes.”
Venture capital synergy
Complementing the PE landscape is Saudi Arabia’s thriving venture capital ecosystem.
Venture funding in the Kingdom grew nearly 15-fold between 2018 and 2023, reaching $6.1 billion.
Programs such as the Neom Investment Fund and Aramco Ventures are catalyzing innovation, particularly in technology-driven sectors.
Papriwal said that encouraging partnerships between local firms and international general partners will ease navigation across the business landscape and accelerate investments.
Future outlook
As Saudi Arabia continues to reshape the PE landscape, several trends are expected to define its trajectory,
Increased deal flow, with ongoing economic diversification and infrastructure development will sustain growth in PE transactions.
Alongside that, sectoral expansion will occur, with health care, technology and logistics likely to attract increased investment, leveraging the Kingdom’s young, tech-savvy population and strategic geographical location.
Enhanced exit opportunities are also set to help foster a rise in IPOs, and strategic mergers and acquisitions, while secondary market activity will provide more avenues for PE firms to realize returns.
Papriwal summarized the Kingdom’s trajectory, explaining that Saudi Arabia’s proactive strategies “create a wider appeal to private equity investors who will give the Kingdom access to global capital.”
He added: “The resulting inflow of international capital, expertise and technology will have a profound and long-lasting impact on Saudi Arabia’s economic development, positioning the Kingdom as a major global business hub in the years ahead.”
Saudi banks’ new residential mortgages rise 17% to $24bn
Saudi Central Bank data show highest issuance in 2 years
Home ownership at 63.74% in 2023, goal of 70% by 2030
Updated 21 February 2025
Dayan Abou Tine
RIYADH: Saudi Arabia’s banks issued SR91.1 billion ($24.28 billion) in new residential mortgages to individuals in 2024 — a 17 percent rise on the previous year, according to official data.
Figures from the Saudi Central Bank, also known as SAMA, show that this is the highest annual mortgage issuance in two years.
The fourth quarter of 2024 accounted for 33 percent of the total, likely coinciding with the declining interest rate environment. This trend underscores the strong demand for home financing in the Kingdom, as well as the impact of monetary policy shifts on borrowing costs.
The Kingdom is steadily progressing toward its goal of 70 percent home ownership by the end of the decade.
According to the latest official data from the Housing Program — an initiative under Vision 2030 — Saudi family home ownership reached 63.74 percent in 2023.
As economic diversification initiatives continue to boost housing development and home-ownership aspirations, the Kingdom’s mortgage landscape is expected to remain dynamic, influenced by both global and domestic trends.
The increase in residential mortgage issuance signals growing confidence in Saudi Arabia’s real estate market. With declining interest rates and ongoing government efforts to expand home ownership, the Kingdom’s housing sector appears poised for sustained growth in the years ahead.
One of the key factors influencing mortgage rates in Saudi Arabia is the Saudi Interbank Offered Rate, or SAIBOR, which serves as a benchmark for floating-rate loans.
Given the Saudi riyal’s peg to the US dollar, fluctuations in interest rates in the North American country have a direct impact on SAIBOR and, consequently, on borrowing costs in the Kingdom.
In September, the US Federal Reserve initiated a shift in monetary policy, cutting interest rates by 50 basis points. This was followed by two additional rate reductions of 25 basis points each in November and December.
The easing of US monetary policy translated into lower SAIBOR rates, making home financing more accessible and contributing to the notable expansion of residential lending.
While the recent decline in mortgage rates has fueled demand, future SAIBOR movements will be contingent on multiple factors, including the Federal Reserve’s policy trajectory, Saudi Arabia’s economic conditions, and banking sector liquidity.
At the third Public Investment Fund Private Sector Forum in Riyadh this month, Saudi Arabia’s Minister of Municipalities and Housing Majid Al-Hogail announced that 65 local developers have invested over SR200 billion in the housing sector, highlighting the private sector’s key role in urban development.
Al-Hogail emphasized that Vision 2030 is driving a transformation in Saudi Arabia’s real estate sector, with developments ranging from affordable housing to luxury projects.
He also stressed the need to redefine city planning to align with economic diversification and the Kingdom’s rapidly growing urban population.
According to the minister, the municipal and housing sectors contributed over 16 percent to Saudi Arabia’s real gross domestic product in 2024, while the real estate and construction sectors attracted nearly 16 percent of total foreign investment inflows.
He further noted that residential transactions in Riyadh increased by 51.6 percent between July 2023 and July 2024, totaling 18,500 sales valued at SR26.6 billion, citing a report from real estate services firm CBRE.
Al-Hogail also highlighted the remarkable growth in real estate financing, stating that the banking sector’s real estate financing portfolio expanded from SR165 billion to over SR850 billion.
He attributed this growth to a stimulating and supportive investment environment, which, he said, has reached a favorable stage for both local and international private sector players.
Saudi Arabia’s banks are adopting multiple strategies to enhance liquidity and sustain real estate lending growth. One key approach is issuing sukuk and conventional bonds to strengthen their capital base, ensuring they have sufficient funds to continue mortgage lending.
Additionally, the Saudi Real Estate Refinance Co. plays a vital role by purchasing mortgages from banks, freeing up liquidity for new loans and improving market stability.
Government support also remains a crucial factor, with initiatives from the Ministry of Housing and the Real Estate Development Fund providing guarantees and subsidies that reduce banks’ lending risks and encourage further mortgage issuance.
Furthermore, Saudi Arabia’s banks are diversifying their funding sources by forming partnerships with global investors and foreign banks, attracting more capital into the real estate financing sector.
At the same time, digital transformation is playing an increasing role, with banks integrating fintech solutions, automated credit assessments, and digital mortgage platforms to streamline loan processing, reduce operational costs, and improve accessibility for borrowers.
These combined efforts are helping banks maintain a steady flow of liquidity while supporting the Kingdom’s growing real estate sector.
Oil Updates — crude heads for weekly gain on supply jitters
Updated 21 February 2025
Reuters
TOKYO/SINGAPORE: Oil prices fell on Friday but were still poised for a weekly gain on supply disruption in Russia while uncertainty looms over a potential peace deal in Ukraine.
Brent futures slipped by 73 cents, or 0.95 percent, to $75.75 a barrel by 2:04 p.m. Saudi time, while US West Texas Intermediate crude lost 73 cents, or 1 percent, to $71.75.
Both have gained about 1.4 percent this week — the largest weekly advance since early January. Brent would be marking a second week of gains after three weeks of declines. WTI is set for its first week of gains after four weekly declines.
The market has taken a relatively neutral yet nervous stance on crude oil prices, said Ole Hansen at Saxo Bank, with Brent trading near the middle of the expected range for the year, between $65 and $85 a barrel.
Market focus was also on oil supply disruption.
Russia said Caspian Pipeline Consortium oil flows, a major route for crude exports from Kazakhstan, were reduced by 30 percent to 40 percent on Tuesday after a Ukrainian drone attack on a pumping station.
However, oil flows from Kazakhstan’s Tengiz oilfield via CPC are uninterrupted, Russian news agency Interfax reported on Friday, citing Tengizchevroil.
Kazakhstan has pumped record high oil volumes despite damage to its CPC export route via Russia, industry sources said on Thursday. It was not immediately clear how Kazakhstan had been able to pump record volumes.
Relations between Ukraine President Volodymyr Zelensky and US President Donald Trump deteriorated this week after Zelensky criticized US and Russian moves to negotiate a peace deal without Kyiv’s involvement. The rift was widened by Trump comments blaming Ukraine for starting the three-year-old conflict.
Trump denounced Zelensky as “a dictator without elections” on Wednesday after Zelensky said Trump was trapped in a Russian disinformation bubble, a response to the US president suggesting Ukraine had started the war.
“Any immediacy of an ending to the war is disappearing and so are oil trading positions driven by an idea of a Russian future without sanctions,” said PVM analyst John Evans.
But after a meeting with Trump’s envoy for the Ukraine conflict on Thursday, Zelensky said Ukraine was ready to work quickly to produce a strong agreement with the US on investments and security.
Pressuring crude prices on Friday was a rise in US crude oil stockpiles while gasoline and distillate inventories fell last week as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.
On the demand front, JPMorgan analysts expect cold weather in the US and a post-holiday increase to industrial activity in China to contribute more demand in the coming week
Closing Bell: Saudi main index closes in green at 12,388
Updated 20 February 2025
Nadin Hassan
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Thursday, gaining 70.56 points, or 0.57 percent, to close at 12,388.15.
The total trading turnover of the benchmark index was SR5.95 billion ($1.58 billion), as 95 of the listed stocks advanced, while 137 retreated.
The MSCI Tadawul Index increased by 13.19 points, or 0.86 percent, to close at 1,551.49.
The Kingdom’s parallel market Nomu rose, gaining 44.37 points, or 0.14 percent, to close at 31,474.69. This came as 40 of the listed stocks advanced, while 47 retreated.
The best-performing stock was Anaam International Holding Group, with its share price surging by 6.33 percent to SR23.84.
Other top performers included Etihad Etisalat Co., which saw its share price rise by 5.35 percent to SR63, and Tourism Enterprise Co., which saw a 4.65 percent increase to SR0.90.
The biggest decline of the day was seen in Al Sagr Cooperative Insurance Co., with its share price dropping 9.83 percent to SR15.96.
Saudi Steel Pipe Co. saw its share price drop 6.77 percent to close at SR67.50, while Astra Industrial Group fell 4.81 percent to SR182, reflecting broader market pressures.
Following this, Saudi Steel Pipe Co. reported its annual results for 2024, with net profits rising 15.21 percent year-on-year to SR250 million.
In a Tadawul filing, the company said the profit increase was driven by a rise in gross profit to SR399 million in 2024 from SR283 million the previous year, largely due to higher sales volumes.
Astra Industrial Group reported interim financial results for the period ending Dec. 31, with net profits rising 23.99 percent year on year to SR589.34 million.
The company attributed the growth to higher gross profit across all sectors, increased sales value, and a rise in other income.
Meanwhile, shares of Yamama Cement Co. fell 1.89 percent on the main market today, closing at SR36.25.
In a separate announcement, Nayifat Finance Co. posted its annual results for 2024, with net profits surging 47.93 percent to SR131.23 million.
The company credited the profit increase to higher operational earnings, driven by a decline in the net charge for expected credit loss allowance due to improved write-off recoveries.
In today’s trading, Nayifat Finance Co.’s shares edged up 0.83 percent on the main market to close at SR14.74.
Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment
Updated 20 February 2025
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia is boosting its energy security with an SR13.4 billion ($3.57 billion) investment to expand the Qurayyah power plant, adding 3.01 gigawatts to meet growing demand and support economic growth.
Saudi Electricity Co. and ACWA Power have signed a power purchase agreement with Saudi Power Procurement Co., the Kingdom’s sole licensed electricity buyer, to expand Qurayyah Independent Power Plant. This facility is the largest combined-cycle gas-fired independent energy station in the world.
The initiative supports the Kingdom’s Vision 2030 by improving electricity generation efficiency, reducing costs, and diversifying energy sources to replace liquid fuels in the power sector. It aims to enhance reliability and sustainability through advanced combined-cycle gas turbine technology while reducing carbon emissions and promoting environmental conservation.
The project, overseen by the Ministry of Energy, aims to increase Saudi Arabia’s electricity capacity and efficiency by adding combined-cycle power plant units designed for future carbon capture. According to the principal buyer, the deal was signed with a consortium led by ACWA Power, SEC, and Hajji Abdullah Alireza & Co. Ltd., with SEC and ACWA Power each holding a 40 percent stake.
As one of the Kingdom’s largest power generation projects, it includes the financing, construction, ownership, and operation of a combined-cycle gas power plant, along with the development and transfer of a 380-kilovolt electrical substation, according to the Saudi Press Agency.
SEC is the largest electricity producer, transmitter, and distributor in the Middle East and North Africa, serving over 11 million customers.
ACWA Power — the world’s largest private desalination company — announced that on Feb. 19 it received a notice from the Al-Shuaiba 2 Solar PV Independent Power Plant project company, confirming that it has been granted the commercial operation certificate by the SPPC for the first, second and third groups, with a total capacity of 2,060 MW.
In a statement on Tadawul, the firm added that the initiative is now fully operational, noting that it owns a net stake of 35.01 percent share in the project company.
The body expects the financial impact to be reflected in the current year’s second quarter.
