LONDON: Millennials priced out of London’s traditional housing market are opting to rent tiny apartments in so-called “co-living” developments, a fast-growing area that private investors and venture capital are eager to tap into.
Investors have put more than £1 billion ($1.28 billion) into “microflats,” where residents share facilities such as dining areas, lounges, work spaces, laundry rooms and gyms, and the investors are looking to do more.
The Collective, a property company founded in 2010, is one of London’s major co-living developers. Its Old Oak co-living apartment building in west London is the world’s largest, with 546 people living across 10 floors, according to its website.
Reza Merchant, chief executive of The Collective, said: “There’s a complete lack of affordable and good quality accommodation for young working people.”
Merchant said The Collective was looking to secure more sites across London as well as in other major global cities.
Microflats — which typically range from 200 square feet (about 20 square meters) to 350 square feet for a studio apartment — are already being built across the world, from Hong Kong to New York.
The Collective says tenants at Old Oak have a median age of 28 and a median income of £32,000 per year. They pay £230 to £360 per week, including bills.
“For people at certain stages of their career ... it definitely makes a lot of sense,” Ivan Soto-Wright, a 27-year-old resident of The Collective Old Oak, told Reuters.
The co-living microflats market now accounts for 5 to 10 percent of Britain’s £25 billion build-to-rent private rental sector, made up of institutionally-backed blocks of flats built for families to rent, James Mannix, head of residential capital markets at property group Knight Frank, said.
Investors say the micro-units create more attractive income streams as the more efficient use of space means the rent per square foot in each flat is 10-15 percent more than for traditional rentals.
“This strategy will provide us with an investment that has long-term, defensive characteristics,” said Arron Taggart of hedge fund Cheyne Capital Management, which has invested in one of The Collective’s schemes.
Although investors say they expect demand for microflats to grow, planning restrictions could become an issue because specific local authority permission is needed for new builds.
Native Finance, backed by venture capital firm Passion Capital, is seeking to get London’s local authorities on board. Native’s co-founder Prasanna Kannan said by working with local authorities it can be possible to build more of these innovative schemes.
But large property investors in Britain’s private rental market have tended to focus instead on developing more traditional apartment blocks designed for families to rent.
And others in the industry see limits to co-living developments as an investment class.
“While it is hugely socially encompassing, it does have its drawbacks from an operational perspective. You might have high voids, it costs a lot to run,” Toby Nicholson, a director in property company Colliers’ private rental sector team, said.
“It is going to be relevant, but it’s not going to overtake or outweigh the traditional approach to residential in terms of studios, one and two bedroom regular flats,” Nicholson said.
In central London, small apartments now make up a big chunk of the rental market. In the year to July 31, 42 percent of the flats let in prime central London have been studios and one bedroom units, as single people and couples opt for location over size, property investment fund London Central Portfolio said.
Residents like Soto-Wright said the benefits of micro-flats outweighed any drawbacks.
“As an entrepreneur you really want to bootstrap and be smart around your expenses.”
“On the micro-sites ... people are starting to rethink how small should they be going,” Roger Southam, a director in Savills’ property management team, said. People do not want to stay in another format of student accommodation when they are starting their journey into business life, he added.
In terms of yield, microflats have a net initial yield of 50-100 basis points above a traditional build-to-rent private rental sector project, Adam Challis, head of UK residential research at property consultant JLL, said.
Property group Savills said a traditional build-to-rent private development in London has a 3.5-4 percent net yield. Knight Frank puts comparable prime central London yields at 3-3.25 percent.
A litmus test of institutional interest will come with the outcome of the sale of The Collective’s Old Oak scheme, property consultants said. The development was put on the market earlier this year.
— REUTERS
London microflats attract investor cash as millennials embrace co-living
London microflats attract investor cash as millennials embrace co-living
Saudi Arabia’s participation at WEF strengthens global push for innovation, AI
RIYADH: Saudi Arabia’s active participation in the World Economic Forum underscores its commitment to advancing global initiatives aimed at enhancing the digital economy, fostering innovation, and leveraging artificial intelligence, a senior official has stated.
Minister of Communications and Information Technology Abdullah Al-Swaha emphasized that the Kingdom’s presence at the annual Davos meeting, held from Jan. 20 to 24, comes at a pivotal moment as the world transitions from the digital age to the era of artificial intelligence.
Saudi Arabia’s participation aligns with its National Strategy for Data and AI, which seeks to position the country among the top 10 nations on the Open Data Index and the top 20 in peer-reviewed data and AI publications by 2030.
The strategy also aims to attract SR30 billion ($7.9 billion) in cumulative foreign direct investment and SR45 billion in local investment in data and AI by the same year.
In a statement to the Saudi Press Agency, Al-Swaha noted that the forum offers a global stage to showcase the Kingdom’s developmental, economic, and technological progress under the framework of Vision 2030.
He highlighted Saudi Arabia’s collaboration with the international community to harness AI as a vital tool for propelling sustainable development and achieving shared global objectives.
He underlined that these endeavors aim to enhance quality of life, bolster the digital economy, and generate fresh employment opportunities across diverse sectors, all contributing to a sustainable and prosperous future for everyone.
Earlier this month, the Ministry of Communications and Information Technology, in collaboration with King Abdullah University of Science and Technology and consultancy firm Hello Tomorrow, released a report highlighting Saudi Arabia’s advancements in deep technology.
The report revealed that up to 50 percent of the Kingdom’s deep tech startups are focused on developing artificial intelligence and the Internet of Things. It also noted that more than 43 high-growth startups in Saudi Arabia collectively secured over $987 million in funding by 2022.
The funding surge was attributed to a rapidly expanding investment ecosystem, which ranked among the top three in the Middle East and North Africa for funding volume and deals.
In September 2024, an analysis by global consulting firm Strategy& Middle East projected that Saudi Arabia’s technology sector could achieve an SR15 billion increase in operating profit by 2028 through the adoption of generative AI.
The study suggested that a 15-percentage-point margin growth is attainable if technology companies capitalize on the demand for advanced hardware and infrastructure while developing and commercializing new generative AI use cases.
Saudi Arabia’s holdings in US treasuries at $135.6bn in November
- Kingdom’s holdings in US treasuries increased by 5.85 percent in November compared to the same month in 2023
- Saudi Arabia is only GCC country to secure a place among the top 20 holders of US Treasury securities
RIYADH: Saudi Arabia’s holdings in US treasuries reached $135.6 billion by the end of November, representing a marginal decline of 2.58 percent compared to October, official data showed.
The Kingdom’s holdings in US treasuries stood at $139.2 billion in October, while it was $143.9 billion and $142.8 billion in September and August, respectively.
Data released by the US Treasury Department revealed that Saudi Arabia maintained its 17th place among the largest holders of such financial instruments in November.
The Kingdom and other nations are investing in these bonds for their safety, diversification benefits, and alignment with their economic relationships with the US.
The latest data also said that Saudi Arabia is the only country in the Gulf Cooperation Council region to secure a place among the top 20 holders of US Treasury securities.
The Kingdom’s holdings in US treasuries increased by 5.85 percent in November compared to the same month in 2023, according to the report.
Saudi Arabia’s holdings of US Treasuries were distributed among long-term bonds worth $112.3 billion, representing 83 percent of the total.
Short-term bonds amounted to $23.2 billion, accounting for 17 percent.
The report said Japan was the largest investor in US treasury bonds in November, with holdings totaling $1.09 trillion, representing a decline of 0.91 percent compared to October.
Japan was followed by China and the UK, with portfolios valued at $768.6 billion and $765.6 billion, respectively. Luxembourg and the Cayman Islands were ranked fourth and fifth on the list, with treasury holdings amounting to $424.5 billion and $397 billion.
Canada secured the sixth spot with holdings worth $374.4 billion, closely followed by Belgium with portfolios of $361.3 billion.
Ireland came in eighth with treasury reserves worth $338.1 billion, followed by France and Switzerland, with assets amounting to $332.5 billion and $300.6 billion, respectively.
Taiwan was ranked 11th on the list, with treasury holdings worth $286.9 billion.
Singapore came in the 12th spot with assets amounting to $257.7 billion, followed by Hong Kong and India, with holdings worth $255.7 billion and $234 billion.
The UAE held US treasury holdings worth $73.13 billion by the end of November. Kuwait also maintained a steady presence in the US Treasury market, with its holdings standing at $51.2 billion.
Kuwait’s non-oil exports hit $75m in December 2024
JEDDAH: Kuwait’s non-oil exports rose to 23.2 million dinars ($74.9 million) in December 2024, a 12.08 percent increase from November, according to data from the Ministry of Commerce and Industry.
The ministry’s Department of International Organizations and Foreign Trade Affairs reported that 1,766 certificates of origin were issued for Kuwaiti exports to Gulf Cooperation Council countries in December, with a total value of around 16 million dinars.
This marked a slight decline in volume compared to November 2024, which saw 1,785 certificates valued at approximately 11.4 million dinars.
The rise in December exports comes despite broader economic challenges. A recent report from the International Monetary Fund highlighted Kuwait’s ongoing recovery in its non-oil sector amid easing inflation.
However, the IMF noted that the country’s real gross domestic product contracted by 1.5 percent year on year in the second quarter of 2024, driven by a 6.8 percent decline in the oil sector, offset by a 4.2 percent expansion in non-oil activities.
Exports to Arab countries included 336 certificates covering 11 nations, totaling 7 million dinars in December, down from 8.9 million dinars across 10 countries in November.
European exports saw modest growth, with five certificates issued to four countries, valued at 179,413 dinars in December, compared to three certificates worth 47,811 dinars issued to three countries in the prior month.
Kuwaiti exports to African markets showed an uptick, with three certificates issued for three countries in December, valued at 26,027 dinars, up from one certificate worth 16,071 dinars issued in November.
In the Americas, five certificates were issued for one country in December, valued at 150,060 dinars, marking a decline from November’s 10 certificates worth 223,296 dinars, which covered three countries.
Asian and Australian markets saw six certificates issued for four countries, valued at 39,544 dinars in December, compared to five certificates worth 51,662 dinars issued to three countries in November.
The ministry clarified that certain Kuwaiti exports do not require certificates of origin, meaning the figures reflect only shipments processed through the ministry. This underscores the evolving nature of global trade dynamics, where some importers bypass formal documentation for specific products.
Kuwait’s exports continue to gain traction in global markets, spanning GCC nations, Arab countries, Europe, Africa, Asia, Australia, and the Americas. Key export products include liquid gases, foodstuffs, and polyethylene, as well as organic solvents, and packaging materials like empty cartons.
Additionally, refined oils, mineral oils, medical oxygen, dairy products, empty glass bottles, and copper rods remain significant contributors to Kuwait’s export portfolio, according to KUNA.
GCC ports rank among world’s top 70 for efficiency in 2024
RIYADH: Ports in the Gulf Cooperation Council have earned global recognition, with 10 container terminals ranking among the 70 most efficient worldwide in 2024, according to newly released data.
The rankings highlight the growing importance of the Gulf region in international shipping and logistics.
The ports were selected from a pool of 405 terminals globally, underscoring the region’s increasing role in global trade, the Emirates News Agency reported, citing data from the GCC Statistics Center.
In addition to port efficiency, countries in the region—Saudi Arabia, the UAE, Oman, and Qatar—have been ranked among the top 35 nations for the size of their maritime fleets by tonnage and capacity, according to the UN Conference on Trade and Development’s 2024 report.
The GCC Statistics Center noted that the Gulf’s commercial fleets now account for 54.2 percent of the total Arab shipping fleet, reinforcing the region’s status as a major player in global maritime trade. With more than 25 major seaports across its member states, the GCC’s maritime infrastructure is positioned for further growth.
On container productivity, two Gulf ports have secured rankings among the world’s top performers, handling more than 4 million containers annually. Another eight ports were classified as medium performers, with annual container throughput ranging between 500,000 and 4 million. These results reflect the region’s substantial investments in port infrastructure and logistics capabilities.
The GCC countries—Saudi Arabia, Oman, the UAE, and Qatar—are continuing to enhance port efficiency and productivity through strategic investments aimed at establishing the region as a critical global trade hub. These efforts include significant infrastructure upgrades, operational improvements, and policy initiatives designed to strengthen the competitiveness of the Gulf's maritime sectors.
In Saudi Arabia, the government’s Vision 2030 framework, under the National Industrial Development and Logistics Program, seeks to position the Kingdom as a global logistics hub. Key projects led by the Saudi Ports Authority include a SR640 million ($170.5 million) expansion of Jeddah Islamic Port’s berths to accommodate mega container ships with capacities of up to 24,000 twenty-foot equivalent units. Additionally, the government has allocated over SR7 billion to upgrade container terminals at King Abdulaziz Port in Dammam, enhancing both infrastructure and operational capacity to boost trade competitiveness.
Oman is capitalizing on its strategic location to strengthen its role in global maritime trade. The country is making substantial investments in port infrastructure, integrating advanced technologies to improve operational efficiency and streamline logistics operations.
The UAE continues to lead the maritime sector, with Dubai’s Jebel Ali Port ranked as the world’s ninth-largest container port. The UAE is home to DP World, one of the largest port operators globally, managing 181 terminals across 64 countries.
In Qatar, port infrastructure development is central to the country’s broader economic diversification strategy. The Ministry of Commerce and Industry has introduced incentives, including reduced service fees, to attract foreign investment and enhance the business environment, with the goal of integrating Qatari ports more fully into global trade networks.
GCC-Stat emphasized the region’s commitment to sustainable port development, noting that the focus on sustainability has positioned Gulf ports as key players in global supply chains. The organization also highlighted the strategic importance of Gulf maritime operations in maintaining regional security and stability.
The GCC’s ongoing investments in port infrastructure and sustainable practices are expected to further solidify the region’s role as a critical node in global trade.
IMF projects Saudi economy to grow 3.3% in 2025, 4.1% in 2026 amid global shifts
RIYADH: Saudi Arabia’s economy is projected to grow by 3.3 percent in 2025 and 4.1 percent in 2026, according to the latest forecasts from the International Monetary Fund.
These projections reflect significant shifts in the global economic landscape, with the ongoing OPEC+ agreement on oil production cuts playing a key role in tempering growth expectations for the Kingdom in the near term.
In its January 2025 World Economic Outlook Update, the IMF outlined the broader economic outlook for the Middle East and Central Asia, where growth is anticipated to rise by 3.6 percent in 2025, followed by a slightly stronger 3.9 percent in 2026.
These figures are notably lower than previous estimates, primarily due to downward revisions in Saudi Arabia’s growth forecast, which had initially projected a 4.6 percent expansion for 2025. As the region's largest economy, Saudi Arabia's performance significantly impacts the overall regional outlook.
In addition to the impact of oil production cuts, the IMF highlighted other challenges influencing the region's economic prospects, including inflationary pressures and ongoing global uncertainties. Despite these challenges, Saudi Arabia’s ambitious diversification initiatives under Vision 2030—which aim to expand non-oil sectors such as tourism, technology, and renewable energy—are expected to support long-term growth.
Global economic outlook
Globally, the IMF projects economic growth to stabilize at 3.3 percent in both 2025 and 2026, signaling a slowdown compared to previous years. Advanced economies are forecast to grow by 1.9 percent in 2025 and 1.8 percent in 2026, facing persistent challenges such as inflation, tightening monetary policies, and geopolitical tensions.
Among these advanced economies, the US is expected to lead with a growth rate of 2.7 percent in 2025, followed by a modest deceleration to 2.1 percent in 2026.
In contrast, emerging markets and developing economies are expected to grow at 4.2 percent in 2025 and 4.3 percent in 2026, buoyed by the strong performances of countries like India and China. India’s growth is forecast to remain robust at 6.5 percent, while China is projected to experience growth of 4.6 percent in 2025 and 4.5 percent in 2026.
Saudi Arabia’s short-term outlook
The reduction in Saudi Arabia’s 2025 growth forecast is largely attributable to the extended OPEC+ agreement, which continues to limit oil production in an effort to stabilize global oil prices. While these production cuts support oil price levels, they simultaneously constrain the Kingdom's oil revenues, a crucial element of its gross domestic product.
Despite the impact on short-term growth, Saudi Arabia is actively pursuing comprehensive economic reforms to reduce its dependency on oil. Initiatives such as the development of megaprojects like NEOM, as well as strategic investments in green energy and infrastructure, are designed to drive diversification and open new avenues for sustainable growth.
Sectoral diversification and Vision 2030
Saudi Arabia’s Vision 2030 initiatives are already showing promising results in diversifying the economy. Non-oil sectors, particularly tourism, have seen notable advancements. Efforts to position Saudi Arabia as a global destination have led to a surge in international visitors, contributing significantly to the Kingdom’s economic development.
Additionally, the financial sector and emerging industries such as technology and renewable energy are increasingly playing a pivotal role in boosting GDP growth. As the largest economy in the Middle East, Saudi Arabia remains a key driver of regional economic stability.
The IMF’s projections for the Middle East and Central Asia highlight that the region’s overall growth is heavily influenced by developments in Saudi Arabia. While other economies, including Egypt and Gulf states, are also undertaking significant reforms, Saudi Arabia continues to serve as the linchpin for regional economic performance.
