DUBAI: The buzz that surrounded the three-day Cityscape Global property exhibition in Dubai this week belied a market still suffering from expat job losses and investor uncertainty.
While property investors hope for an Expo 2020-related rebound, prices remain weak.
Still, the prospect of a further weakening of the dollar may provide a silver lining to the clouds that hang over the market.
The US dollar, to which the UAE dirham is pegged, has lost about 7 percent against the euro in the last three months, while it is about 4 percent down on the pound over the same period.
“Though slow economic growth in the region and continued new supply may keep a lid on capital price appreciation, new activity arising from events such as Expo 2020 may provide a floor for price depression,” said Anita Yadav, Head of Fixed Income Research at Emirates NBD. “The slowing economy has led to lower job creation and lower immigration of expats into the region,” she added.
Similarly, the relatively strong US dollar, while losing some ground in recent months, has made property purchases expensive for many overseas buyers.
Dubai residential property prices and rents are set to fall further this year as losses of high-paying jobs and dwindling household incomes boost vacancy rates, according to Phidar Advisory, a real estate consultancy, in a report published in April.
“Sales volumes of completed properties are at a six-year low and vacancies are rising across the city,” the report said.
Prices of single-family homes, known locally as villas, slid 10.2 percent on average over the past 12 months, while apartment values remained unchanged. Villa rents dropped 4.9 percent while apartment leases fell 3.4 percent in the period.
Still, positive signs are emerging on the buyers’ side of the market from the UK, India and Pakistan as their currencies gain ground against the dollar.
Analysts said this may explain a slight improvement in apartment sales volumes.
Dubai resident Faraz Waqar feels the time is not yet right to buy a home. He had even thought about selling a property he owns in Pakistan so that he could buy in Dubai — but the experience of his friends changed his mind.
“Some of them invested and have lost around 30 percent on the value of their property so far in the last couple of years. So I am happy with the current scenario — that I stayed away from property investments in Dubai,” said the marketing professional.
Salman Hameed, who has in the past invested in Dubai, is now having second thoughts. “It’s all a matter of supply and demand. Too much supply reduces the investment appeal,” he said.
But beyond this basic economic equation, the emirate still offers many positives to investors that are hard to find elsewhere in a volatile region.
“This attracts end users who want to make Dubai their home and want to save on rent. But for the speculators, I don’t think Dubai offers a good opportunity anymore. They are better off investing in their own countries,” said the Pakistani medical practitioner who has been living in the city for over a decade.
The models of outlandish projects which have become a hallmark of the show over the years were in plentiful supply, such as a floating home with a basement from which to observe passing marine life. However, despite such attractions, the sales agents appeared almost to outnumber the visitors around some stands.
This did not prevent some of those visitors sounding upbeat about the property market before the exhibition ended on Wednesday.
Fahd Dawood, a real estate consultant based in Dubai, believes that investors continue to have faith in Dubai’s market.
“I was not expecting that this year’s Cityscape Global was going to be that busy, with genuine buyers around,” said Dawood, noting that direct property sales had returned to the halls of the exhibition after being prohibited for a number of years following a return of rampant speculation.
Data from the Dubai Land Department (DLD) revealed the list of nationalities that formed the bulk of buyers in the period between January 2016 and June 2017.
Emiratis made close to 12,000 investment transactions worth 37.4 billion dirhams ($10.2 billion), while Indian, Pakistani, Saudi Arabian and British investors ranked second, third, fourth and fifth respectively.
Saudis led the Gulf nations with 5,366 transactions worth 12.5 billion dirhams and UK citizens took top spot among the European nationalities with 4,188 transactions worth 9 billion dirhams.
Dubai property investors look to Expo 2020 as job losses detract from Cityscape buzz
Dubai property investors look to Expo 2020 as job losses detract from Cityscape buzz
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Saudi flyadeal records lowest complaint in November, 99% resolution rate: GACA
- flynas was second, with 12 complaints per 100,000 travelers and a resolution rate of 100%
- Saudia was third, with 13 complaints per 100,000 passengers and a resolution rate of 99%
RIYADH: Saudi low-cost airline flyadeal recorded the fewest complaints among its competitors in November, with just 11 per 100,000 travelers, and achieved a 99 percent resolution rate, a recent report revealed.
Issued by the Kingdom’s General Authority of Civil Aviation, the classification index for air transport service providers and airports is designed to inform passengers about performance, helping them make more informed decisions.
Low-cost carrier flynas was second, with 12 complaints per 100,000 travelers and a resolution rate of 100 percent, and Saudia was third, with 13 complaints per 100,000 passengers and a resolution rate of 99 percent.
Saudi Arabia’s aviation sector is rapidly growing as the nation aims to become a regional hub and major tourist destination. Through the Saudi Aviation Strategy, which opens the sector to global investors, streamlines licensing, and promotes competition, over $100 billion in aviation investment is being attracted to support the Kingdom’s Vision 2030’s goals.
The report is in line with GACA’s efforts to promote transparency, demonstrate its credibility and keenness to deal with travelers’ complaints, stimulate fair competition, and develop and improve services.
The figures from the analysis also align well with the National Aviation Strategy by the Kingdom, which aims to increase the air passenger throughput more than three-fold to 330 million by 2030.
The GACA data further revealed that despite serving over 6 million annual passengers, King Khalid International Airport in Riyadh had 13 complaints, a low rate of 0.4 percent per 100,000 passengers, and a 100 percent resolution record.
Prince Sultan Bin Abdulaziz International Airport, with nearly 6 million annual passengers, also had a complaint rate of 0.4 percent per 100,000 passengers and a 100 percent resolution rate.
King Saud Airport had the lowest complaints among domestic airports, with a rate of 3 percent per 100,000 passengers and a 100 percent resolution rate.
The most common complaints in November were related to luggage, flights, and tickets.
According to the 2024 State of Aviation Report by GACA, a key measure of the aviation sector’s success is the 7 percent growth in air cargo, reaching 900,000 tonnes, alongside a record-breaking 112 million passengers in 2023.
This passenger volume was surpassed by a 17 percent increase in the first half of 2024, with the number of flights growing by 12 percent compared to the same period last year, reaching 815,000.
Six initiatives unveiled to strengthen Saudi-Yemeni economic ties
RIYADH: The Saudi-Yemeni Business Council has announced six key initiatives aimed at enhancing trade and investment ties between Saudi Arabia and Yemen, while also supporting Yemen’s ongoing economic development.
The initiatives were unveiled during a joint council meeting held in Makkah on Sunday, attended by over 300 Saudi and Yemeni investors, according to Al-Ekhbariya.
Abdullah bin Mahfouz, chairman of the Saudi-Yemeni Business Council, which is part of the Federation of Saudi Chambers, disclosed that agreements had been made to establish three new Saudi-Yemeni companies.
The first company will focus on renewable energy, with an initial capital investment of $100 million, to generate solar-powered electricity for Yemen.
The second venture will operate in telecommunications, utilizing Starlink satellite networks. The third company will organize exhibitions and conferences in Yemen to promote Saudi products and support the country’s reconstruction efforts, as reported by the Saudi state-owned channel.
In addition to these initiatives, the council has proposed upgrading the infrastructure at border crossings between the two countries, improving logistics services to facilitate smoother trade.
The trade volume between Saudi Arabia and Yemen currently stands at SR6.3 billion ($1.6 billion), with Yemeni imports from Saudi Arabia accounting for just SR655 million. However, sectors such as mining, agriculture, livestock, and fisheries in Yemen remain largely underdeveloped and present significant growth opportunities.
Among the key recommendations is the establishment of quarantine centers to inspect Yemeni livestock, agricultural products, and seafood, aimed at increasing Yemen’s exports to Saudi Arabia. There are also plans to create “smart food cities” in border regions to bolster food security and promote sustainable agricultural practices through advanced resource management and technology.
Addressing banking and credit challenges is another priority. The council has called for improvements to Yemen’s banking infrastructure, including better collaboration with Saudi banks and the development of Yemen’s exchange sector, to facilitate smoother financial transactions for traders from both countries.
A significant proposal also includes the creation of a Yemeni Investors Club in Saudi Arabia, designed to encourage joint investments and foster business partnerships between the two nations.
Abdulmajid Al-Saadi, co-chairman of the Yemeni Business Council, commended Saudi Arabia’s recent reforms in investment regulations, highlighting that Yemeni capital, estimated at SR18 billion, has increasingly been channeled into Saudi markets. This places Yemen third among foreign investors in the Kingdom.
For over 23 years, the Saudi-Yemeni Business Council has played a pivotal role in fostering economic relations between the two countries, organizing forums, identifying trade and investment opportunities, and promoting bilateral business exchanges. The targeted sectors for cooperation include renewable energy, agriculture, livestock, telecommunications, and trade development, in line with regional and global food security challenges.
In 2023, trade between Saudi Arabia and Yemen amounted to SR6.2 billion, with Saudi exports totaling SR5.6 billion, which included dairy products, fuels, and vegetables. Yemeni imports from Saudi Arabia reached SR661.9 million, consisting of fruits, seafood, and printed materials.
Saudi Arabia has provided significant financial support to Yemen over the past few decades, including over $50 billion in funding for central bank deposits, government budgets, and development projects.
Riyadh leads Saudi real estate surge with 20.8% rise in office rents
RIYADH: The real estate market in Riyadh is experiencing significant growth, with rents for Grade A office spaces rising 20.8 percent year on year in the third quarter of 2024, reaching SR2,131 ($567.31) per sq. meter. This increase reflects the city’s expanding economic activity, driven by both a thriving private sector and ongoing government initiatives aimed at positioning the capital as a global business and investment hub. According to JLL’s latest market analysis, this surge in demand for high-quality office spaces is contributing to a historic low in vacancy rates, which fell to just 1.6 percent in Q3 2024.
The report attributes the rise in office rents to the Kingdom’s economic diversification efforts, particularly the continued growth of the private sector in Riyadh.
The city remains an attractive destination for businesses and investors, with strong demand for Grade A office space in key districts. JLL also highlighted that Northern Riyadh, with its superior accessibility and high-quality developments, is increasingly favored by occupiers, driven by the area's efficient workspaces and ample parking, which help mitigate rising traffic congestion.
In Jeddah, Grade A office rents rose by 11.6 percent year on year, reaching SR1,338 per sq. meter, with a low vacancy rate of 3.7 percent. These trends reflect broader market strength across Saudi Arabia’s key cities.
Hospitality sector thrives
Saudi Arabia’s hospitality sector continues to see impressive growth, fueled by a combination of high-profile events and the Kingdom’s expanding tourism infrastructure. With events like Riyadh Season and AlUla Season drawing millions of visitors, coupled with the ongoing development of urban infrastructure, the Kingdom is solidifying its status as a leading global leisure and business destination.
According to the Ministry of Tourism, Saudi Arabia’s leisure tourism has skyrocketed by 656 percent since 2019, with 17.5 million international visitors arriving in the first seven months of 2024 alone.
This boom in tourism, supported by initiatives such as the streamlined tourist visa system and a growing entertainment sector, has boosted the Kingdom’s appeal as a global leisure destination. In fact, Saudi Arabia has already surpassed its original Vision 2030 target of attracting 100 million visitors and is now aiming for 150 million by 2030.
“The hospitality sector is set for continued expansion, driven by a packed events calendar and a steady influx of religious tourists,” said Saud Al-Sulaimani, country head of JLL Saudi Arabia. “These factors will fuel demand for accommodations and enhance occupancy rates in key cities.”
In Riyadh, the average daily rate for hotels increased by 19 percent year on year in Q3 2024, reaching SR736.3, while revenue per available room saw a 17.1 percent rise to SR440.3. Despite a minor dip in occupancy by 1.2 percentage points, these metrics reflect the growing strength of the hospitality sector. Jeddah, on the other hand, saw a 10.3 percent year-on-year decline in RevPAR, attributed to a 12.1 percent drop in ADR, although occupancy rates rose by 1.4 percentage points. Makkah and Madinah presented mixed trends, with RevPAR declining by 2.9 percent in Makkah, while Madinah saw a slight increase of 1.6 percent.
“Performance metrics in the hospitality sector are expected to improve as we approach the year's end, fueled by key events like the Riyadh and AlUla Seasons, as well as continued religious tourism,” JLL added.
Residential market growth
The residential markets in Riyadh and Jeddah also saw strong performance in the third quarter of 2024, driven by strong demand and shifting buyer preferences. In Riyadh, 4,000 new residential units were added in Q3, bringing the total stock to 1.46 million. Jeddah saw even greater growth, with 8,000 new units delivered, increasing its stock to 899,000 units.
Residential property prices in both cities also saw significant increases, with Riyadh experiencing a 12 percent year-on-year rise in sales prices, while Jeddah saw a 6 percent increase.
“This is an exciting time for Saudi Arabia, with unprecedented growth across multiple sectors,” said Al-Sulaimani. “The combination of soaring tourism numbers, rising hospitality revenues, and strong demand for residential properties is creating a dynamic environment that presents immense opportunities for investors and businesses alike.”
He added: “The Kingdom’s commitment to diversifying its economy is evident, and we are excited to see how these developments will shape our future.”
Saudi Arabia seeks to establish specialized courts to resolve business disputes
RIYADH: Saudi Arabia plans to establish specialized courts to address investment disputes, enhance market confidence, and support its Vision 2030 strategy of becoming a global business hub.
The initiative, revealed through a survey conducted by the Ministry of Investment and shared with the Federation of Saudi Chambers, is aimed at evaluating the need for such judicial bodies across key sectors, Al Arabiya reported.
These courts are expected to bolster trust in the Kingdom’s legal framework, aligning with its broader legislative and judicial reforms designed to accelerate progress under Vision 2030 and the National Investment Strategy.
The specialized courts are part of the strategy’s fourth pillar, launched by Crown Prince Mohammed bin Salman in 2021, which seeks to mobilize SR12 trillion ($3.19 trillion) in economic activity through transformative projects, improved infrastructure, and job creation.
In August, Saudi Arabia announced a major overhaul of its investment laws, reaffirming its commitment to creating a business-friendly environment for global enterprises.
Revised laws integrate existing commercial rights into a unified framework, prioritizing transparency and simplifying regulatory processes. They offer enhanced protections, including property and intellectual property rights, streamlined registrations, and the establishment of dedicated service centers to expedite government interactions.
These updates build on previous measures such as the Civil Transactions Law, Private Sector Participation Law, Companies Law, Bankruptcy Law, and the introduction of Special Economic Zones.
At the time, Saudi Investment Minister Khalid Al-Falih stated that the law underscored Saudi Arabia’s dedication to fostering a secure and investor-friendly environment, bolstering economic growth, and solidifying the Kingdom’s status as a leading global investment hub.
He noted that Vision 2030’s policy framework offered investors the confidence and stability needed to thrive, particularly as other markets faced significant volatility.
The law also seeks to create a competitive market by encouraging fair competition and guaranteeing equal opportunities for both domestic and international investors.
Earlier this year, Saudi Arabia launched its regional headquarters program, offering businesses incentives such as a 30-year exemption from corporate income tax and withholding tax on headquarters activities, along with access to discounts and support services.
In October, Al-Falih confirmed the success of the initiative, announcing that the Kingdom had attracted 540 international companies to establish regional headquarters in Riyadh, surpassing its 2030 target of 500.
Oman launches food security projects to ensure supply, sustainability
- Food security is a top priority for Oman, particularly in light of the increasing risks that climate change poses to global supplies
- Production will be distributed locally, regionally, and globally to meet increasing demand
JEDDAH: Oman has launched new food security initiatives, partnering with government entities and the private sector to strengthen supply chain operations and enhance sustainability.
The scheme, announced by the sultanate’s Ministry of Agriculture, Fisheries, and Water Resources, reflects the Gulf state’s commitment to long-term food security and economic diversification as part of its broader development goals.
Food security is a top priority for Oman, particularly in light of the increasing risks that climate change poses to global supplies.
The government has launched several initiatives, including the Food Security Strategy 2010-2020, which focuses on three key areas such as managing demand, boosting local production, and ensuring reliable imports, with specific goals to promote sustainable agriculture, rural development, and fisheries.
The country also launched the National Nutrition Strategy 2020-2030, introduced by the Ministry of Health in 2021, aligning with Oman’s Vision 2040. The initiative aims to improve nutrition, eliminate malnutrition, and enhance food security, which aligns with the World Health Organization’s Regional Nutrition Strategy.
Oman also unveiled the Sustainable Agriculture and Rural Development Strategy 2040, which aims to enhance the productivity and sustainability of agriculture, forestry, and fisheries. To further these goals, the sultanate also launched the Million Date Palm Plantation Project.
Salem bin Abdullah Al-Ghufaili, the agriculture ministry’s director general of food security, said that these projects include a sugar refining project — the first of its kind in the country, adding that it will be located on an area of 18,000 sq. meters at Sohar Port, with an annual production capacity of approximately 1 million tonnes, as reported by Oman News Agency.
Al-Ghufaili said that the plant will be equipped with state-of-the-art, European-made production lines, utilizing the latest technological advancements to produce refined sugar of the highest quality from raw sugar.
He also said the production will be distributed locally, regionally, and globally to meet increasing demand, adding that the project’s rapid progress, with 91 percent completion, is bringing it closer to the final stages.
In a statement to ONA, the director general added that Salalah Mills Co. is currently implementing a food industries center project in the Khazaen Economic City, with an estimated cost of 18.5 million Omani rials ($48.08 million) and a production capacity of around 1.4 million units per day in its first phase.
He added that the initiative includes an industrial bakery, production lines for frozen and semi-cooked pastries, equipment and silos for storing raw materials, and refrigerated and dry storage facilities for products.
Al-Ghufaili said that the undertakings include constructing wheat silos at Sohar Port, increasing storage capacity to 160,000 tonnes to ensure sufficient supplies for the population.
He also highlighted a new partnership between Khazaen Economic City and Zircon Food Industries Co. to build an integrated industrial complex for filtering, sorting, and packaging rice, sugar, and spices, along with large-scale food storage units.
He stressed the ministry’s efforts to secure essential foodstuffs and storage to ensure availability during emergencies while maintaining price stability and shielding the market from fluctuations caused by global economic crises.
The ministry also strategically stockpiles key items such as rice, wheat, and sugar, as well as lentils, powdered milk, cooking oil, and tea.
