DUBAI: Dubai property prices have capped a third year of decline as the market awaits a long-anticipated Expo rebound amid expatriate job losses. It means the current property bear market has lasted almost as long as the post-financial crisis rout, where prices fell by as much as half.
Dubai property prices peaked in September 2008, according to the Cluttons mid-range apartment index. The market was then in decline for about 43 months until March 2012, when it rose steadily until June 2014. Since then, prices have remained in the doldrums despite big developers doing a brisk trade in off-plan sales as buyers turn toward stage payment plans because of the large deposits now required for traditional mortgages.
Brokers hope that rising demand caused by the release of big construction orders ahead of Expo 2020 could jolt the market out of its three-year malaise. “Expo will undoubtedly have an impact,” said Faisal Durrani, head of research at Cluttons. “This year we are expecting something like 11 billion dirhams ($3 billion) worth of contracts linked to the Expo to be awarded.”
Research shows there is a lag of six to 12 months for the award of such contracts to translate into higher demand for commercial or residential property. “So we are expecting the market to show greater stability later this year in more locations, assuming all things stay equal and there are no more global economic shocks — which is a big ‘if,’” he said.
While there is no official data measuring the number of expatriate workers leaving and arriving in the emirate, removal companies said there has been a pickup in activity this summer — a traditionally busy time for the sector. “We have seen more oil- and gas-related inquiries for clients leaving the region,” said a spokesperson for Hong Kong-headquartered Crown Worldwide Group.
On a vast tract of empty land close to Dubai’s Palm Jumeirah, lorries towing 20-foot shipping containers from Maersk and Evergreen wait to load up with the furniture and belongings of expatriates. “Many people are leaving,” said a driver from the Pakistani city of Lahore who owns his own removals van. “When people are leaving it is good for us, and when they are coming also.”
The property industry in Dubai and the wider region remains hostage in part to macroeconomic forces greater than the push and pull of housing supply and demand, such as the strong dollar to which the dirham is pegged, making homes expensive for overseas investors.
A weak oil price has also hurt investor sentiment, while a political standoff between Qatar and some of its neighbors could be a further brake on the long-anticipated Expo-fueled rebound. Several major corporations including Emirates, Etihad and the Abu Dhabi National Oil Co. have shed thousands of jobs over the last year as the slowing economy has forced them to cut costs and trim benefits.
Despite efforts by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil exporters to limit production, the price of crude has failed to rally as much as hoped, as shale oil production in North America keeps the market well supplied.
The current property trough coincides with the extended period of oil weakness that began in the summer of 2014. That has had a dramatic impact on regional economies, which have been forced to slash subsidies and embark on aggressive economic reform programs, in turn hurting property prices as banks pull back on lending and investor confidence weakens.
But as Dubai looks to Expo 2020, some analysts are hopeful that prices will be supported by demand from construction industry professionals and rising visitor numbers. Other changes simplifying visit visas could also boost confidence. Simon Townsend, head of strategic advisory valuation at CBRE in Dubai, believes the Expo may have a bigger impact on the global perception of the city than property values per se.
“Expo is going to help from a global PR perspective,” he said. “It will change the way Dubai is viewed, and in a good way — not just all about high-end tourism and footballers on the beach. There are other positive things happening like changes to visa rules especially for Asian visitors, which are really making a difference.”
Dubai property doldrums challenge post-crisis rout
Dubai property doldrums challenge post-crisis rout
25 companies compete for six Saudi sports clubs in privatization push, says minister
RIYADH: Saudi Arabia’s ongoing sports privatization initiative has sparked significant interest from both local and international investors. A total of 25 companies are now actively pursuing investment opportunities in six of the 14 sports clubs proposed for privatization in the first phase.
During the Saudi Arabia Budget 2025 Conference, Sports Minister Prince Abdulaziz bin Turki Al-Faisal discussed the economic potential of the privatization drive, estimating that these investments could amount to SR500 million ($133 million).
“There is also interest from foreign companies in investing and acquiring local sports clubs, which we will announce soon,” the minister said.
Prince Abdulaziz noted that the Saudi Pro League’s international profile is on the rise, with broadcasts now reaching over 160 countries. Revenues from the league have increased by 33 percent this year, reflecting growing participation and interest in the Kingdom’s sports sector.
The expansion of sports is part of Saudi Arabia’s broader Vision 2030 reforms, which seek to diversify the country’s economy. To facilitate investment in the sector, the privatization process has been streamlined with the launch of a platform that licenses academies and clubs, making it easier for individuals and businesses to invest.
“In 2018, no one was allowed to establish a club except through the hassle of regulatory processes. Now, through the platform, anyone can open their club or academy and invest easily in the sector,” he explained.
Saudi Arabia has also made notable progress in sports tourism, hosting around 80 sports events over the past four years, attracting 2.5 million visitors. Major events such as the Formula One race in Jeddah have brought substantial economic benefits. The 2023 edition, for instance, generated over 20,000 job opportunities and attracted attendees from 160 different countries.
The minister further highlighted improvements in sports sector administration, including a reduction in contract termination penalties among clubs from SR616 million to SR30 million last year. He also pointed to the shift from part-time or voluntary staffing to a full-time workforce of 5,000 employees, with a target of creating 130,000 direct and indirect jobs by 2030.
In another session at the conference, Saudi Tourism Minister Ahmed Al-Khateeb shared that tourism’s contribution to the Kingdom’s gross domestic product had increased from 3 percent in 2018 to 5 percent in 2023, with a target of 10 percent by 2030.
“In the recent G20 meeting in Brazil, they presented the tourism growth of the nations in the first seven months of this year compared to the same period in 2019. Saudi Arabia was the highest with 70 percent, followed by Turkiye with 5 percent — a huge growth gap between the first and the second,” Al-Khateeb remarked.
Domestic travel in Saudi Arabia has also seen a surge, with the average number of flights per Saudi citizen or resident rising from 1.4 in 2018 to 2.5 in 2023. This compares favorably with leading global tourism destinations such as France (3.5) and Spain (2.8).
Saudi Arabia’s focus on cultural, sports, and historical events has positioned the Kingdom to capture a share of the 1.6 billion travelers expected to grow to 3.8 billion by 2032. Al-Khateeb emphasized that Vision 2030 initiatives have been central to this growth, driving both job creation and economic diversification.
In a separate panel, Ibrahim Al-Mubarak, assistant minister of Investment, highlighted the role of monetary policies in fostering sustainability and building trust with investors.
“There is no other spot in the world that has seen the transformation witnessed in the Kingdom at such an unprecedented speed since the launch of Vision 2030,” Al-Mubarak said.
He also praised the upcoming launch of a new investment system, set to replace the current foreign investment system in early 2025. This new framework aims to offer equal support to both domestic and international investors, consolidating investor rights and freedoms into a more transparent and business-friendly environment.
Al-Mubarak further celebrated the Kingdom’s success in the regional headquarters program, which has already surpassed its Vision 2030 target of attracting 500 regional headquarters by 2030.
“We are now hosting 540 companies by 2024,” he added, emphasizing Saudi Arabia’s growing position as a regional business hub.
Prince Sultan International Airport drives Tabuk’s growth with 25% surge in flights
JEDDAH: Prince Sultan International Airport in Tabuk is playing a key role in Saudi Arabia’s transportation expansion, with a 25 percent increase in flight operations.
This surge highlights the region’s alignment with Vision 2030, focusing on enhanced logistics, connectivity, and sustainability.
During a recent visit to the region, Saudi Minister of Transport and Logistics Services Saleh Al-Jasser affirmed that Tabuk is experiencing substantial growth, which supports the broader objectives of the National Transport and Logistics Strategy.
The minister emphasized that the rise in airport operations — including both the number of flights and the diversity of domestic and international routes — signals further development in the coming years.
Launched in 2021, Saudi Arabia’s transport and logistics strategy aims to transform the country into a global logistics hub connecting three continents.
The strategy seeks to elevate all transport services and is a central element of Vision 2030. The plan includes an investment of over $266.7 billion by 2030, with $53.3 billion already deployed.
Al-Jasser also highlighted the region’s advanced road infrastructure, built to international standards, which is designed to accommodate the growing population and economic activity while ensuring safety and efficiency for travelers.
Noting the significant progress in Tabuk’s transport sector, the minister expressed his gratitude to the Kingdom’s leadership for its ongoing commitment to improving services across all sectors, particularly in transportation.
He emphasized that these initiatives not only address current demands but are also geared towards future goals, particularly in enhancing supply chain efficiency and supporting both domestic and international logistics networks.
The minister further underscored the importance of environmental sustainability in transportation, advocating for eco-friendly solutions and the integration of cutting-edge technologies into transport operations.
Al-Jasser also acknowledged the leadership of Tabuk Gov. Prince Fahd bin Sultan, praising his steadfast support for the region’s development projects and his role in enhancing transport services for residents and visitors alike.
He commended the strong partnership between regional authorities and the Ministry of Transport, which has been instrumental in achieving shared goals.
During his visit, the minister held discussions with members of the Tabuk Chamber of Commerce, exploring opportunities for further collaboration with the private sector to advance the goals of the NTLS. He also met with local residents to hear their insights, suggestions, and priorities regarding the region’s transport and logistics infrastructure.
Moody’s upgrades 6 Saudi GRIs to Aa3, citing strong sovereign support
RIYADH: Moody’s has upgraded the ratings of six major government-related institutions in Saudi Arabia, including the Public Investment Fund, to Aa3 from A1.
The move reflects strong sovereign backing and stable credit linkages to the government.
The agency also assigned the Aa3 rating to Saudi Aramco, Saudi Basic Industries Corp., and Saudi Electricity Co., as well as Saudi Power Procurement Co., and Saudi Telecom Co.
Moody’s assigns an Aa3 rating to companies with high quality, low credit risk, and strong ability to repay short-term debts, providing an assessment of the creditworthiness of borrowers, including governments, corporations, and other entities that issue debt.
“The rating action is a direct consequence of the sovereign rating action and reflects the credit linkages between the Government of Saudi Arabia and each of the six entities,” said Moody’s.
It added: “While several of these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.”
The strong ratings received by these firms is an indication of Saudi Arabia’s robust economic stability, following Moody’s upgrade of the Kingdom’s credit rating to Aa3 with a stable outlook in November.
In May, Fitch Ratings upgraded Saudi Arabia’s credit rating to A+ with a stable outlook.
PIF
The upgrade of PIF’s long-term issuer rating to Aa3 from A1 aligns with the Saudi government’s rating action and reflects the strong credit linkage between the sovereign wealth fund and the Kingdom, according to Moody’s.
The report also noted that PIF is expected to receive strong and extraordinary support from the Saudi government whenever needed.
“PIF is closely interlinked with the Kingdom because it is one of the main vehicles of the Kingdom to execute its Vision 2030; PIF continues to receive contributions from the Kingdom via asset transfers; and given the fund’s investment focus and concentration in domestic markets,” added the US-based agency.
According to the analysis, PIF’s rating is in line with that of the Saudi government, meaning the fund’s rating could be downgraded if the sovereign rating declines.
In July, PIF’s consolidated financial statement revealed that the fund generated SR331 billion ($88.3 billion) in revenue in 2023 from its diverse investment portfolio, reflecting over 100 percent growth compared to 2022.
Saudi Aramco
The report indicated that Aramco’s rating upgrade reflects the high likelihood of extraordinary support from the government if needed.
The US-based agency also noted that the energy company has access to nearly all of Saudi Arabia’s vast hydrocarbon resources and significant petrochemical operations.
Earlier in November, Aramco reported a net profit of SR103.37 billion for the third quarter of 2024, surpassing analyst expectations, which had projected a median net income of SR101.06 billion.
SABIC
According to Moody’s, SABIC’s rating upgrade is due to its strong reliance on the government and the high probability of receiving government support in the event of financial distress.
The report also highlighted the company’s strong global position in the petrochemical and fertilizer markets as another key factor behind the credit rating upgrade.
In the third quarter of this year, SABIC reported a net profit of SR1 billion, a turnaround from the net loss of SR2.87 billion in the same period last year.
SEC
Describing SEC as the “dominant vertically integrated electricity utility in Saudi Arabia,” Moody’s stated that the company served over 11.23 million customers as of Sept. 30, 2024.
“SEC’s rating reflects the significant credit linkages between SEC and its ultimate shareholder, the Government of Saudi Arabia. All of SEC’s assets are in Saudi Arabia and the company benefits from supportive government policies,” said the US-based agency.
In the third quarter of this year, SEC reported a net profit of SR4.7 billion, a 19.8 percent increase compared to the same period last year.
SPPC
Moody’s stated that SPPC has a clear public policy mandate that aligns its interests and objectives with those of the government.
As the sole licensed principal buyer of electricity in Saudi Arabia, the company has significant credit linkages with the government, which played a crucial role in the latest rating action.
Moody’s also noted that the rating reflects SPPC’s low business risk profile, its monopoly position in the Kingdom, and its ability to maintain a strong liquidity profile despite high working capital seasonality.
stc
According to the report, the rating upgrade of stc – the leading integrated telecommunications and ICT operator in Saudi Arabia – reflects the company’s strategic importance to the government, as well as the state’s high level of control through PIF.
Moody’s added that stc generates over 90 percent of its revenue in the Kingdom and plays a key role in supporting the government’s technological and digital ambitions, a crucial goal outlined in Vision 2030.
Affirming stc’s dominance in the Saudi market, the company reported a net profit of SR11.23 billion in the first nine months of this year, a 2 percent increase compared to the same period in 2023.
Eyewa raises $100m in Series C to boost expansion across GCC
RIYADH: Eyewa, a Riyadh-based eyewear retailer, secured $100 million in a series C funding round led by General Atlantic, with participation from Badwa Capital and Turmeric Capital.
The funding will fuel eyewa’s ambitions to expand its regional footprint, enhance its supply chain, and drive innovation in the eyewear sector.
The company plans to open at least 100 new stores in 2025, adding to its existing network of over 150 locations across the Gulf Cooperation Council region, including Saudi Arabia, the UAE, Kuwait, Bahrain, and Oman.
“We are proud of and feel even more emboldened by the remarkable trust placed in us by top global and regional investors,” said Anass Boumediene, co-founder and co-CEO of eyewa.
“In a sector that had not seen much disruption in the past decade, our success in this funding round reflects not only the strength of our business model, but also the spirit of innovation across the region’s startups as we continue to dream big and break new ground in our respective industries,” he added.
The capital will also support investments in research and development and talent acquisition as eyewa strengthens its position as a leader in the eyewear market, the company said in a press release.
As part of its growth strategy, eyewa plans to establish a “state-of-the-art” production hub in Riyadh in the first quarter of 2025.
The facility will include a warehouse, a fulfillment center, and a lens manufacturing unit, designed to improve the efficiency and speed of product delivery.
Owned and operated by eyewa, the center will provide a supply chain advantage that aligns with the company’s goal of delivering affordable and accessible eyewear to customers across the region.
Co-founder and co-CEO Mehdi Oudghiri emphasized the company’s customer-centric approach: “This accomplishment is a testament to the hard work of our team, our strong track record as an omnichannel retailer, and our commitment to challenging convention.”
“The additional capital will allow us to pursue the development of innovative products tailored to our customers, and continue pushing the boundaries of customer experience in our region,” Oudghiri added.
Based in both Riyadh and Dubai, eyewa was founded in 2017 and has grown into a prominent omnichannel retailer, combining e-commerce with physical stores to cater to rising consumer demand. The company also runs The Optical Club, a brand focused on providing accessible and affordable eyewear options.
“As part of our mission to make eyewear accessible to everyone, everywhere, we will leverage the support of our new partners and continue our retail expansion to all corners of the GCC,” said Abdullah Al-Rugaib, co-founder and managing director of eyewa.
He added that their extensive network and premier app, along with a tech-enabled supply chain, make eyewa the preferred retail platform for customers across the region.
Ziyad Baeshen, vice president at General Atlantic and a board member at eyewa, said: “The company’s impressive growth trajectory thus far is a testament to the vision of the leadership team and consumer appetite for authentic, direct-to-consumer brands in the Middle East.”
Additional investor support came from Badwa Capital and Turmeric Capital, both of whom lauded eyewa’s leadership and vision.
“Since first investing in eyewa, we have been impressed by the team’s clear vision and strong execution capabilities,” said Abdulaziz Al-Falih, partner at Badwa and board member at eyewa.
Fabio Andreottola, partner at Turmeric Capital, added: “eyewa represents the very essence of innovation and ambition in the Middle East’s retail landscape. As a business that has continually pushed boundaries in eyewear, we are proud to support eyewa’s team in this pivotal growth phase.”
Saudi Arabia, Djibouti ink deal to protect mutual investments
RIYADH: Investments between Saudi Arabia and Djibouti will see new protection measures thanks to an agreement between the two countries.
The deal, which was inked on the sidelines of the second day of the 28th World Investment Conference taking place in Riyadh from Nov. 25 — 27, aims to provide many advantages to investors.
These include investment protection, national treatment, and fair and equitable treatment, as well as transparency, and the right to resolve disputes through national courts or international arbitration, according to the Saudi Press Agency.
The agreement aims to provide a safe business environment that increases the volume of mutual investments in all sectors. It also seeks to further encourage bilateral relations and economic partnerships between the two sides.
This falls in line with the significant progress in bilateral trade, which reached approximately SR7 billion ($1.86 billion) in 2023, marking an important step toward sustainable growth and stronger economic ties between the Kingdom and Djibouti.
The deal was signed by the Kingdom’s Minister of Investment, Khalid Al-Falih, and by the Minister of State for Investments and Private Sector Development in Djibouti, Safia Ali Jadila.
The two sides stressed the importance of the deal’s role in supporting and motivating both countries’ private and government sectors to invest and achieve the ambitious investment programs witnessed by the two nations.
Earlier this month, logistical, trade, and investment ties between the two countries were further strengthened during the sixth session of their joint committee, held in Riyadh on Nov. 18. The meeting was chaired by Saudi Minister of Transport and Logistic Services Saleh Al-Jasser and Djibouti’s Minister for Foreign Affairs Mahamoud Ali Youssouf.
In his opening remarks during the event, Al-Jasser highlighted the deep-rooted ties between the two nations, noting that the discussions were just the beginning of efforts to enhance trade and investment, particularly in logistics.
In August, the two nations launched a maritime initiative to strengthen trade ties, including the establishment of new shipping lines to boost connectivity with East African markets, which serve a consumer base of around 500 million people.
These ongoing efforts between Saudi Arabia and Djibouti are set to significantly enhance bilateral trade, investment, and regional connectivity, marking a promising new chapter in their economic partnership.
