‘Saudi people want to shop in the mall, not from their computer’

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Khalid Al-Jasser
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Updated 10 April 2017
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‘Saudi people want to shop in the mall, not from their computer’

What happens when you turn a top-notch banker into a shopkeeper? If the plans for Arabian Centres under its CEO Khalid Al-Jasser are anything to go by, you will end up with some very big shops.
After 27 years in which he reached the top of the Saudi banking industry, Al-Jasser was appointed last year to lead the company that has become the biggest malls operator in Saudi Arabia, and which has plans to get even bigger.
He is rather more than a shopkeeper, of course, as the head of a multibillion-dollar company that designs, builds and operates megamalls.
“You cannot teach an old dog new tricks, they say, but I don’t think that’s true. I was a banker for many years until I was hijacked by Arabian Centres. It was about time. I’d reached the top in the banking system, and had done corporate, treasury and investment banking. I’m on a steep learning curve in the malls business, but at the end of the day, it’s all about the same thing — money,” he said.
We are speaking in the ornate lobby of the Jumeirah Al-Qasr hotel in Dubai, where Al-Jasser had been topping up his expertise in his new profession at the World Retail Congress. The annual event is about shops and shopping, of course, but it has also gained a reputation as a forum where new consumer and social trends are analyzed.
That is of crucial importance to Saudi Arabia, and Al-Jasser’s business. If the Saudi strategy to transform economy and society is to succeed, it needs men like him at the sharp end of implementation.

Gulf’s biggest market
Arabian Centres — part of the Fawaz Al-Hokair conglomerate — is at the exact spot where government policy meets Saudi consumers, the people who form the biggest single economic market in the Arabian Gulf and whose buy-in to the transformation process is critical.
Over the past 15 years, Arabian Centres had led the consumer revolution in the Kingdom, and now has 19 malls, accounting for about 10 percent of the gross leasable space in the country, and 10 more planned for the next two years.
It is more than just a business. It has been at the forefront of social change in Saudi Arabia, and will continue to be.
The explosive growth of malls in Dubai is a guide as to how the business can grow quickly, but there are crucial differences in the Saudi and UAE markets, as Al-Jasser explained.
“Malls here (in Dubai) are full of tourists. In Saudi (Arabia), the overwhelming majority of people who go to malls are nationals. They want the full customer experience, which is why our malls are built to such a high standard. They are big spacious buildings, with 45 meters between columns; the ceilings are 16 meters high. Those are the kind of specifications you usually see in palaces, not in malls,” he said proudly.
He also reckons the emphasis on customer experience makes his business more resistant to the pressures of e-commerce sweeping the Gulf. The Al-Hokair holding company is investing significantly in e-commerce in some of its other retail offerings, notably in ladies’ fashion, but it is not the top priority for the malls business. 

This is probably a good time to go for an IPO. We are seriously looking at it. I cannot comment on whether or not we’ve hired advisers, but we are seriously looking at the possibility of an IPO. 
— Khalid Al-Jasser

“We’re keeping an eye on (e-commerce) but Saudi people want to shop in the mall, not from their computer,” he believes.
“But the single biggest difference is that we are not dependent on tourist trade, except perhaps Makkah at certain times. So there is not the seasonality of Dubai. There is a much bigger indigenous population, in a much bigger country than the UAE. We get more than 130 million visits to our malls in a year. That’s more tourists that go to France and Spain combined,” he added.
Saudi Arabia may not depend on tourist seasonality, but it is acutely vulnerable to the fortunes of the Saudi economy. Since the oil price began falling in 2014, consumer spending in the Kingdom has been inevitably hit. The fiscal austerity of 2016, in particular, affected household consumption in the Kingdom, and while there are some indicators that the worst may be over, there is little sign of a strong pickup, according to the London-based consultancy Capital Economics.
“We expect Saudi consumer spending to settle at rates of around 2-3 percent over the coming years, well below those of 6-7 percent recorded in the past decade,” said analyst Jason Tuvey.
Al-Jasser acknowledges the effects of lower spending but said it has not been reflected in footfall at his malls, which has held up well.
“I think that people always panic when oil is falling. But it’s cyclical. In the good old days, when it was as high as $120 people were making profits of 30 to 40 percent, but they panic when they’re just making between 10 and 15 percent. But that’s still a good profit. It’s not as though they’re losing money,” he said.

IPO on the horizon?
So the Arabian Centres expansion goes on. Three new malls in Riyadh, Jeddah and Dammam are under construction, at an estimated cost of several billion riyals, so the commitment to growth seems unstoppable.
How does he plan to fund that growth? Arabian Centres is, of course, a cash generator and has funded its growth out of normal reserves and bank borrowing — but buying land, development and construction are all costly processes.
The holding company considered an initial public offering (IPO) in 2014 after the successful IPO of Emaar Malls in Dubai showed there was big investor appetite for the shares. The economic effects of the oil-price decline caused those plans to be shelved, but it is some mark of the confidence with which he sees the future that a share flotation is under active consideration once more.
“This is probably a good time to go for an IPO. We are seriously looking at it. I cannot comment on whether or not we’ve hired advisers, but we are seriously looking at the possibility of an IPO,” said the former banker.
“I cannot tell you about the financial size. We are a private company and not obliged to disclose figures, but I can tell you we are a big company.”
If the IPO goes ahead — some analysts suggest later this year — Arabian Centres will be part of the wave of privatization and stock market flotations envisaged under the National Transformation Plan (NTP) 2020 and the Vision 2030 strategy document.
“I’m very supportive of the plan, and don’t really know anybody who is not supportive. It has widespread support and everybody is behind it. It will put Saudi Arabia ahead of its time. The efforts by Deputy Crown Prince Mohammed bin Salman are key. He is not only leading Saudi Arabia into a new era, but he is also teaching us to be more efficient, not to waste our resources,” he said.
Arabian Centres is also a leading advocate of the other social changes that accompany the new strategy — providing more job opportunities for Saudi nationals and increasing female participation in the workforce.
It provides around 59,000 direct jobs in the Saudi economy, many of them for Saudi nationals. “I think Saudis are prepared to work in retail provided they are trained and get good opportunities.
“We will also want to increase the number of women. We already employ a good number in the fashion business, and that will increase under the economic transformation plans,” he said.
There are around 1,200 women currently employed in the Al-Hokair group fashion business, and he expects that to rise.
Like other parts of the Gulf, malls are not just shopping centers, but entertainment, social and family leisure locations. That will include, at some stage, plans for cinema entertainment in Arabian Centres malls, which the Saudi authorities are considering licensing.
The Al-Hokair group’s hospitality division is also building hotels in or near the Arabian Centres malls. “We are part of a group that is very keen to give its customers care and attention for the whole family,” Al-Jasser said.
We are reaching the end of our time at Al-Qasr, but he has one other thing to add: “Now, put your pen away and I will tell you something,” he said, indicating he wants to go “off record.” I listen intently as he compares and contrasts Saudi energy trends with another, much bigger country that has to remain nameless. He’s obviously thinking well beyond the shopping counter.

Khalid Al-Jasser, chief executive officer, Arabian Centres
• Khalid Al-Jasser joined Arabian Centres as CEO in May 2016.
• Under his leadership, the retail real estate company aims to double its retail offering by 2018.
• Arabian Centres currently it operates 19 malls spread across 10 cities in the Kingdom. It has 10 malls in the pipeline.
• Al-Jasser, previously CEO of Bank Albilad, was credited with growing the bank’s operations and its emergence as a leading Shariah-based financial solutions provider.
• He previously served as the executive vice president of Riyad Bank where he spent 12 years in various leadership roles.
• He also served on the Boards of Bank Albilad, Saudi Travelers Cheque Company, and Qassim Cement Company.
• Al-Jasser is fluent in Arabic, English and Spanish.


Saudi Green Initiative Forum to focus on climate resilience and sustainability 

Updated 5 sec ago
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Saudi Green Initiative Forum to focus on climate resilience and sustainability 

RIYADH: Nature-based solutions for climate resilience and community adaptation will take center stage at the fourth edition of the Saudi Green Initiative Forum, set to run from Dec. 3 to 4 in Riyadh. 

The event, held alongside the 16th Conference of the Parties to the UN Convention to Combat Desertification, aims to address pressing global environmental challenges, including land rehabilitation, carbon reduction innovations, and sustainable financing. 

The forum will also address the role of natural solutions in helping communities adapt to climate change and the need to enhance efforts to preserve the Kingdom’s rich biodiversity, according to a statement. 

This aligns with the UNCCD’s goal of restoring 15 billion hectares of land by 2030, as a recent UN study indicates that 90 percent of the Earth’s soil is at risk of degradation by 2050. 

During the Riyadh COP16 conference, the SGI exhibition will open its doors to visitors to learn about the Kingdom’s efforts in reducing emissions, planting trees, and protecting the environment through innovative, interactive experiences. 

The exhibition will provide valuable insights into the Kingdom’s qualitative initiatives, focusing on three key goals – reducing carbon emissions by 278 million tons annually by 2030, planting 10 billion trees, and protecting 30 percent of Saudi Arabia’s land and marine areas.

It will also host the “Saudi Green Initiative Dialogues” series, launched in 2023 and returning this year with participation from international experts. The discussions will cover the latest trends and innovations in climate and sustainability, fostering new opportunities for a more sustainable future. 

Launched in 2021, the SGI aims to engage all sectors of society in climate action and support Saudi Arabia’s goal of achieving net zero emissions by 2060. 

The initiative underscores the Kingdom’s climate efforts, addressing challenges like rising temperatures, low rainfall, sand and dust storms, and desertification, all aimed at enhancing quality of life and building a sustainable future for generations to come. 

Saudi Arabia’s hosting of COP16 highlights its commitment to environmental protection. As the largest multilateral conference the Kingdom has ever hosted, it mobilizes global cooperation to drive the necessary changes and actions for the future of the planet. 


Private sector must be part of the solution in Saudi land conservation, says top official

Updated 41 min 17 sec ago
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Private sector must be part of the solution in Saudi land conservation, says top official

RIYADH: The private sector must play a pivotal role in Saudi Arabia’s land conservation efforts, according to the Kingdom’s deputy minister of environment and adviser to the president of COP16, Osama Faqeeha.

Faqeeha shared this message during the COP16 opening press conference on Dec. 2, underscoring the need for businesses to contribute actively to environmental sustainability.

“Businesses can be part of the solution by focusing their investments in infrastructure, integrating drought resilience, sustainable land management, biodiversity protection, and climate resilience into their operations, while also leveraging innovation,” Faqeeha stated.

The deputy minister emphasized that environmental protection must become a core element of business strategy: “That needs to be a visible and tangible financial contribution of the private sector in land conservation.”

Faqeeha highlighted that such investments would bring multiple benefits to businesses, including improved biodiversity, climate resilience, food security, and social well-being.

“The business of exploiting degraded land and then moving to recover virgin land is not sustainable—environmentally, socially, or even for the businesses themselves,” he added.

Faqeeha also warned about the broader impacts of land degradation on business stability: “We are seeing now that land degradation is a major cause of migration and conflict. And, of course, political instability is not good for business, so companies must consider these factors as well.”

His call for greater private sector involvement aligns with Saudi Arabia’s growing environmental initiatives, emphasizing the need for collaboration between government and businesses in addressing pressing ecological challenges.

Faqeeha’s comments reflect a shift toward integrating sustainability into business models, demonstrating that preserving the environment can also protect long-term corporate interests. He stressed that innovative solutions must be scaled up, particularly in light of the significant economic costs associated with land degradation.

During the press conference, Ibrahim Thiaw, the executive secretary of the UNCCD, also urged for a more prominent role for the private sector in combating global land degradation, stressing that it is a major driver of the crisis.

“We are very happy to have high-level participation from the private sector at COP16,” Thiaw said. “This is not only for governments to negotiate among themselves, but also to engage the private sector because the number one driver of land degradation in the world is food systems, mining, and cotton production for fashion.”

Thiaw commended Saudi Arabia for its leadership in addressing drought and land degradation, especially in the world’s most vulnerable regions.

“I would like to thank the government of Saudi Arabia for sparking this movement, which will likely take us the next 10 years or more to reverse the tide on drought,” he noted.

The initiative, Thiaw explained, targets the 80 poorest countries, as well as lower-middle-income nations, to help them transition from reactive drought responses to proactive measures like early warning systems and agricultural resilience.

Highlighting the urgency of the issue, Thiaw noted: “We have already degraded 40 percent of the land in the world.” He stressed that restoring 1.5 billion hectares of degraded land could help produce necessary food, provide clean water, and ensure breathable air.

Thiaw also pointed out the need for increased financing, particularly from the private sector.

“Only 6 percent of land restoration funding comes from the private sector,” he said. “We need the private sector to invest in their land and business to secure their production and ensure their activities are sustainable in the long run.”

As the global population grows, Thiaw warned that food systems must evolve. “We need to produce twice as much food by 2050 to feed a growing population and middle class,” he stated.

Thiaw identified addressing drought, land restoration, and financing as key priorities in the fight against global land degradation.

Prof. Johan Rockström, director of the Potsdam Institute for Climate Impact Research, also spoke about the goals of COP16, anticipated outcomes, and insights drawn from the Special Report on Land: Planetary Boundaries: Confronting the Global Crisis of Land Degradation.

The report provides practical suggestions for promoting sustainable land use and food production to protect human health and the environment.

“Humanity is at a critical juncture, and for the first time, we need to consider the real risk of destabilizing life support on the entire planet,” Rockström said.

He noted that current trends in global warming could push temperatures over 3°C within 75 years, a scenario he described as catastrophic. “This is a pathway that unequivocally leads to disaster. There’s absolutely no scientific evidence that we can support a world population under such conditions,” he added.

The global land area affected by degradation, which spans approximately 15 million sq. km, is increasing by about 1 million sq. km annually.

Rockström stressed the critical role of land in reversing this trend. “Land is a fundamental precondition that will determine whether or not we can turn this around or continue down an unstoppable path toward even worse warming levels,” he said.

He outlined the devastating consequences of continued land degradation, warning: “We are losing 1 million sq. km of healthy land each year.” This loss, he noted, is pushing the planet toward disaster.

“Unsustainable land management—how we manage agriculture, forestry, and land use—is the single largest emitter of greenhouse gases in the global economy, contributing roughly 23 percent of emissions,” he said. However, intact ecosystems still absorb 25 percent of carbon dioxide emissions, creating a delicate balance.

“The planet is just barely balancing,” Rockström cautioned. “For every day we lose more intact land, we lose that capacity, and the teetering balance will collapse.”

 


Closing Bell: Saudi main market closes in red to settle at 11,739  

Updated 48 min 51 sec ago
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Closing Bell: Saudi main market closes in red to settle at 11,739  

RIYADH: Saudi Arabia’s Tadawul All Share Index dropped by 0.02 percent, or 2.39 points, to settle at 11,739.35 points on Monday.   

The total trading turnover of the benchmark index was SR5.4 billion ($1.4 billion), as 82 of the listed stocks advanced, while 143 retreated.      

The MSCI Tadawul Index also decreased by 1.30 points, or 0.09 percent, to close at 1,470.29.      

The Kingdom’s parallel market Nomu increased, gaining 115.94 points, or 0.38 percent, to close at 30,289.06 points. This comes as 37 of the listed stocks advanced while as many as 44 retreated.      

The index’s top performer, Saudi Reinsurance Co., saw a 5.99 percent increase in its share price to close at SR47.80.      

Other top gainers included Saudi Chemical Co., which saw a 5.07 percent increase to reach SR9.54, while Fitaihi Holding Group’s share price rose by 4.58 percent to SR4.34.   

Electrical Industries Co. also recorded a positive trajectory, with share prices rising 4.51 percent to reach SR7.42.  

Tamkeen Human Resource Co. also witnessed positive gains, rising 4.41 percent to reach SR71.   

SHL Finance Co. saw the steepest decline on TASI, with its share price dropping 3.87 percent to SR16.90.    

National Medical Care Co. followed with a 3.54 percent drop to SR158.20. MBC Group Co. also saw a notable drop of 3.40 percent to settle at SR51.20.    

Al-Baha Investment and Development Co. saw a decline of 3.33 percent, with shares settling at SR0.29. 

Saudi Ceramic Co. also underperformed, with shares dropping 3.15 percent to SR35.40.   

In Nomu, Sure Global Tech Co. was the best performer, with its share price rising by 8.18 percent to reach SR88.60.    

Arabian Plastic Industrial Co. and Purity for Information Technology Co. also delivered strong performances. Arabian Plastic Industrial Co. saw its share price rise by 5.28 percent, reaching SR36.90, while Purity for Information Technology Co. recorded a 3.95 percent increase, standing at SR13.70.    

Enma AlRawabi Co. also fared well with 3.93, and the Neft Alsharq Co. for Chemical Industries increased 3.86 percent.   

Fesh Fash Snack Food Production Co. shed the most in Nomu, with its share price dropping by 5.23 percent to reach SR14.50.    

Almuneef Co. for Trade, Industry, Agriculture and Contracting experienced a 4.94 percent decline in share prices, closing at SR5.20, while AME Co. for Medical Supplies dropped 4.67 percent to settle at SR102.   

Aqaseem Factory for Chemicals and Plastics Co. declined by 4.53 percent, while Naas Petrol Factory Co. saw a drop of 4.15 percent, making them among the top decliners.   

On the announcement front, the Saudi Exchange has revealed the listing and commencement of trading for shares of United International Holding Co. on the main market, effective Tuesday, Dec. 3, 2024.     

In accordance with listing regulations, daily price fluctuation limits will be set at 30 percent above or below the share price for the first three days of trading.    

During this period, static price fluctuation limits will also be applied at 10 percent.  


Saudi Arabia establishes ‘Friends of the Chair’ group to advance COP16 outcomes 

Updated 02 December 2024
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Saudi Arabia establishes ‘Friends of the Chair’ group to advance COP16 outcomes 

RIYADH: Saudi Arabia aims to secure concrete outcomes from COP16 by establishing a “Friends of the Chair” group tasked with drafting the Riyadh Policy Declaration, a key outcome document of the conference. 

Osama Faqeeha, Saudi deputy minister of environment and adviser to the COP16 presidency, announced the formation of the group, emphasizing its role in shaping the conference’s ministerial declaration. 

“The Friends of the Chair group will be facilitated by a group representing the COP presidency, and a report on the outcomes of its work will be submitted directly to me in my capacity as president,” Faqeeha said. 

This initiative underscores Saudi Arabia’s commitment to ensuring collaborative and actionable results from the conference. 

A Friends of the Chair group is an informal working body established during international conferences to assist in drafting key outcome documents or resolving complex issues. It is composed of representatives selected to support the conference presidency’s objectives. 

Gender equality and sustainable land management were among the major themes discussed at COP16. 

Hungary’s representative highlighted the critical importance of women in addressing challenges like desertification, land degradation, and drought, commending COP16 for its gender-focused initiatives. 

“We particularly welcome the efforts made by the UNCCD secretariat and the global mechanism to promote gender equality and empowerment of all women in the implementation of the convention, considering the crucial role of women in reaching these objectives,” the Hungarian representative said. 

Hungary’s remarks were part of broader discussions on pressing global issues, including drought resilience, sand and dust storms, and sustainable land use. 

These conversations reflected a growing international consensus on the need for gender-inclusive approaches to climate resilience and sustainability. 

Azerbaijan also contributed to the dialogue, emphasizing the importance of sustainable land management in achieving global climate and biodiversity targets, particularly those under the UN Sustainable Development Goal 15. 

“SDG 15, target three, which aims to strive toward land degradation neutrality by 2030, is a driving force for many countries to strengthen policies for sustainable land management,” the representative said. 

Azerbaijan further called for expanding the scope of the UNCCD to include all terrestrial ecosystems beyond the current focus on arid and semi-arid regions. 

“We encourage UNCCD to take further actions to consider the full range of terrestrial ecosystems for the UNCCD to be fully recognized as a global document,” the representative added. 

They also highlighted priorities like drought preparedness, wildfire management, and public-private partnerships to advance regional cooperation and sustainability. 

Running from Dec. 2 to 13, the first few days of COP16 are set to see a number of high-profile summits, ministerial dialogues, and announcements to address the pressing challenges associated with land degradation, degradation and drought. 

French President Emmanuel Macron is expected to be among the attendees, as is the President of the World Bank Ajay Banga. 

 


EU to advocate for integrated solutions to land, water challenges at COP16

Updated 02 December 2024
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EU to advocate for integrated solutions to land, water challenges at COP16

RIYADH: The EU is set to intensify global cooperation at COP16 in Riyadh, working with international partners to combat desertification, land degradation, and drought while also addressing critical issues such as food security, biodiversity loss, and water scarcity.

The 16th Conference of the Parties to the UN Convention to Combat Desertification, which runs from Dec. 2 to 13, will provide a platform for the EU to advocate for stronger action on these interconnected global challenges. These issues, compounded by climate change, threaten economic, social, and environmental stability, as noted in a recent press release.

The EU emphasizes that addressing these challenges is crucial for securing its strategic autonomy, enhancing competitiveness, and ensuring long-term security.

Jessika Roswall, the EU Commissioner for Environment, Water Resilience, and a Circular Competitive Economy, will lead the EU delegation at COP16.

“The world loses 100 million hectares of healthy and productive land every year — around twice the size of France. Without rich and fertile soils, we have no food. Without healthy land, people lose their livelihoods,” Roswall said.

She added: “The EU is committed to working with international partners and will play a crucial, leading role in the negotiations in Riyadh.”

At COP16, the EU will advocate for stronger connections between the three Rio Conventions — climate change, biodiversity, and desertification — and will focus on integrated solutions to the complex challenges of land degradation, biodiversity loss, and climate change. The EU will also push for a shift from reactive, crisis-driven drought management to more proactive, long-term strategies.

Another key focus for the EU will be increasing the involvement of civil society organizations and the private sector in the UNCCD processes. The EU will also push for gender-balanced and gender-responsive approaches to policy implementation. Additionally, securing a robust budget for the UNCCD’s secretariat to support the implementation of agreements beyond 2030 will be a priority.

On Dec. 3, the EU will host the high-level One Water Summit, aimed at advancing global water governance and accelerating progress toward Sustainable Development Goal 6, which focuses on water and sanitation, in preparation for the 2026 UN Water Conference.

During the conference, the European Commission’s Joint Research Centre, in collaboration with the UNCCD, will unveil the World Drought Atlas, providing a comprehensive global assessment of drought risks and offering actionable strategies for building resilience. The UNCCD will also release the Economics of Drought Report, which outlines the economic benefits of preventing droughts and the costs of inaction.

The EU is prioritizing the acceleration of global efforts to address the water crisis, driven by overuse, mismanagement, and the impacts of climate change. With global freshwater demand expected to exceed supply by 40 percent by 2030, the EU has positioned water resilience as a key strategy to tackle future crises in health, food, and energy.