The White Land Tax will spur development opportunities

The Ministry of Housing has completed 23 projects on prefabricated villas to encourage modern technologies. (Shutterstock)
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Updated 22 December 2020
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The White Land Tax will spur development opportunities

  • Consultant offers ways that developers can use modern construction methods to pursue more cost-effective projects

JEDDAH: After the first phase of the White Land Tax (WLT) program generated SR1.4 billion ($373 million), the Ministry of Housing announced it will push ahead with the second phase of the initiative in the first quarter of 2021.

The Kingdom made the decision in 2016 to capitalize on undeveloped land in urban areas, which makes up 30 percent of those areas. A 2.5 percent tax, based on land value, was issued to landowners who had purchased plots but left them undeveloped.

The program aims to increase the volume of plots available to develop urban areas, offer residential land at reasonable prices and provide fair competition while stopping land monopolization.

Susan Amawi, strategic consulting director at real estate consultancy firm JLL, told Arab News that for the Kingdom to achieve its Vision 2030 goals it must continue to invest in giga-projects that help to develop the real estate sector. “The implementation of the second phase of the WLT program is expected to be a primary contributor to the Kingdom’s Vision, as it will encourage developers to speed up the development of their lands to avoid paying taxes,” she said.

The tax program was introduced in four phases. The first one imposes an annual fee on undeveloped plots with an area of 10,000 square meters or more. The second phase imposes tax on developed lands owned by a proprietor and where the plot is in a housing area exceeding 10,000 square meters.

The third phase covers developed land owned by a proprietor in an approved housing area when the total area exceeds 5,000 square meters. In the final phase, the fee is imposed on developed land belonging to a single owner in an urban area and where the plot is of a total area exceeding 10,000 square meters. According to Amawi, introducing the second phase is bound to “narrow (the) supply-demand gap” in the real estate sector, specifically middle-class housing areas and land that could be used for hotel and retail projects in secondary cities.

“Employing low-cost solutions, developments will raise the profile of the cities and bolster the growth of the real estate sector in the Kingdom,” she said.

One of the reasons why developers leave plots idle is high development costs, but Amawi advised them to avoid this by adopting innovative, modern construction techniques.

“Modern construction techniques (MCTs) such as modular or prefabricated construction and 3D printing are known for their sustainability and considerable efficiency in reducing construction cost and time,” she said.

“Research studies have proven that these techniques could save on construction costs by an average of 20 percent and on construction time by around 20 percent to 50 percent more than traditional construction methods,” she said. Opportunities to use these technologies are abundant in the Kingdom. In 2018, Saudi Arabia became the first Middle Eastern country to develop a 3D-printed house in Riyadh. The Ministry of Housing has also completed 23 projects on prefabricated villas to encourage these technologies.

As for hotel developers, Amawi believes MCTs can be used to enhance budget hotel experiences in the Kingdom.

“MCTs (could) contribute to the development of sustainable budget hotels, such as eco-lodges or green hotels. These are designed to blend seamlessly with the city’s culture, heritage and nature, and attract domestic or international tourists visiting on a budget,” she said.

Hotels could reduce operational costs if they invested in creative modern technologies such as “self-check-in hotel systems using mobile apps for room bookings and hotel amenities and room key-activated smart systems that go into energy-saving mode,” Amawi said.

In the retail sector, MCT could be used in indoor and outdoor cinemas, e-gaming expos, entertainment centers for families and concerts through refitting shipping containers, and by using 3D printing to create retail box parks, she said.


Saudi Arabia’ PIF launches company to build and run Expo 2030

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Saudi Arabia’ PIF launches company to build and run Expo 2030

  • New firm to turn site into multicultural hub post-event

RIYADH: Saudi Arabia’s Public Investment Fund has launched Expo 2030 Riyadh Co., a wholly owned entity tasked with developing, managing, and operating the infrastructure and programming for the Kingdom’s first World Expo.

During its development phases, the project is projected to contribute $64 billion to Saudi Arabia’s gross domestic product and generate around 171,000 direct and indirect jobs. Once operational, it is expected to add $5.6 billion to the national economy.

According to an official release on Thursday, the newly established company will play a pivotal role not only in executing the large-scale event but also in preserving its long-term legacy.

The company, known as ERC, is fast-tracking operations to meet its ambitious mandate. It plans to collaborate with both local and international private sector partners to deliver on construction, cultural programming, and event management goals.

“ERC benefits from PIF’s diverse local and global ecosystem and the establishment of the company aligns with PIF’s local real estate strategy, which drives economic transformation and diversification, advancing urban innovation and enhancing quality of life, driven by the ambitious goals of Saudi Vision 2030,” said Saad Al-proud, head of PIF’s Local Real Estate Investment Division.

Covering an expansive 6 million sq. m, the Expo 2030 site will be one of the largest World Expo venues ever built. Strategically located north of Riyadh near the upcoming King Salman International Airport, it will offer direct access to major city landmarks.

Set to run from Oct. 1, 2030 to March 31, 2031, Expo 2030 Riyadh is expected to draw over 40 million visits. Following the event, ERC aims to repurpose the gated expo area into a “global village” — a multicultural destination featuring retail, food  and beverages, and premium residential offerings, all aligned with the Kingdom’s push toward sustainable tourism and innovation.

Participating nations will have the opportunity to construct permanent pavilions, enabling a lasting impact beyond the event itself and encouraging long-term investment and business ties.

PIF emphasized that the initiative reflects its broader strategy to drive economic diversification while securing sustainable financial returns.

The fund remains at the forefront of delivering Saudi Arabia’s transformative giga-projects and real estate ventures, reshaping the national landscape and bolstering the Kingdom’s global positioning.

Riyadh secured the rights to host Expo 2030 in November 2024, winning the international vote in the first round — further solidifying its reputation as a fast-evolving capital that blends connectivity, sustainability, and high quality of life at scale.


Syria completes first global SWIFT transfer since war

Updated 35 min 47 sec ago
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Syria completes first global SWIFT transfer since war

DAMASCUS: Syrian Arab Republic has carried out its first international bank transaction via the SWIFT system since the outbreak of its 14-year civil war, its central bank governor said on Thursday, a milestone in the country’s push to reintegrate into the global financial system.

Abdelkader Husriyeh told Reuters in Damascus that a direct commercial transaction had been carried out from a Syrian to an Italian bank on Sunday, and that transactions with US banks could begin within weeks.

“The door is now open to more such transactions,” he said.

Syrian banks were largely cut off from the world during the civil war after a crackdown by Bashar Assad on anti-government protests in 2011 led Western states to impose sanctions, including on Syria’s central bank.

Assad was ousted as president in a lightning offensive by rebels last year and Syria has since taken steps to re-establish international ties, culminating in a May meeting between interim President Ahmed Al-Sharaa and US President Donald Trump in Riyadh.

The US then significantly eased its sanctions and some in Congress are pushing for them to be totally repealed. Europe has announced the end of its economic sanctions regime.

Syria needs to make transfers with Western financial institutions in order to bring in huge sums for reconstruction and to kickstart a war-ravaged economy that has left nine out of 10 people poor, according to the UN.

Husriyeh chaired a high-level virtual meeting on Wednesday bringing together Syrian banks, several US banks and US officials, including Washington's Syria envoy Thomas Barrack.

The aim of the meeting was to accelerate the reconnection of Syria’s banking system to the global financial system and Husriyeh extended a formal invitation to US banks to re-establish correspondent banking ties.

“We have two clear targets: have US banks set up representative offices in Syria and have transactions resume between Syrian and American banks. I think the latter can happen in a matter of weeks,” Husriyeh told Reuters.

Among the banks invited to Wednesday’s conference were JP Morgan, Morgan Stanley and Citibank, though it was not immediately clear who attended.


Global FDI set to drop again this year after 11% fall in 2024: UNCTAD

Updated 19 June 2025
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Global FDI set to drop again this year after 11% fall in 2024: UNCTAD

RIYADH: Global foreign direct investment is set to fall again in 2025 thanks to high investor uncertainty prompted by trade tensions, according to a UN analysis.

In its latest report, the UN Conference on Trade and Development revealed that FDI dropped 11 percent to $1.5 trillion in 2024, marking a second year of decline.

While FDI flows were up 4 percent, this figure was inflated by volatile flows through conduit economies.

Ongoing trade tensions have lead to downward revisions of most indicators, including FDI prospects, capital formation, and exports of goods and services, as well as financial market volatility, and investor sentiment.

The views of UNCTAD align with a recent report released by the World Bank, which said that FDI flows into developing economies dropped to $435 billion in 2023, the lowest level since 2005, as rising trade barriers, geopolitical tensions, and growing fragmentation curbed cross-border investment.

The World Bank added that FDI into advanced economies also dropped, sinking to $336 billion in 2023, the weakest level since 1996.

Commenting on the latest report, Antonio Guterres, secretary-general of the UN, said: “At a time when the world should be deepening cooperation and expanding opportunity, we are seeing the opposite. 

“Barriers are rising. Globalization is retreating. And the consequences for sustainable development are profound.”

He added: “Infrastructure investment is slowing. Industrial investment is under strain. And developing countries – those most in need – are being left behind.

“Rising trade tensions, policy uncertainty and geopolitical divisions risk making the investment environment even worse.”

The analysis revealed that inward FDI inflows in Saudi Arabia totaled $15.73 billion in 2024, representing a 31 percent decline from the previous year. 

The Kingdom’s outflows in 2024 were $22.04 billion, marking a year-on-year rise of 27.1 percent. 

Geographically, FDI value in Europe stood at $182 billion last year, representing a decline of 58 percent compared to 2023.

North America attracted FDI worth $343 billion, a 23 percent increase year on year. 

Africa’s FDI flows rose by 75 percent year on year, reaching $97 billion in 2024, while FDI flows in developing Asia stood at $605 billion, marking a 3 percent decline. 

In Latin America and the Caribbean, FDI flows stood at $164 billion, representing a 12 percent drop compared to the previous year. 

“Among developed countries, a sharp fall in inflows in Europe contrasted sharply with rising investment in North America. FDI flows to developing countries were flat, despite sizeable increases in Africa and in South-East Asia,” said the report

Earlier this month, global credit rating agency S&P Global said FDI inflows into Gulf Cooperation Council countries are expected to slow in 2025 due to rising investor uncertainty. 

The outlook reflects shifting US trade policies, lower oil prices, and a more gradual rollout of economic diversification projects in the region. 

S&P Global also forecast a net negative impact on global FDI in the near term, driven by the indirect effects of US tariffs, a weaker oil price outlook, and declining global investor confidence.

According to UNCTAD, international project finance also continued its slump in 2024, registering a 26 percent decline in value compared to the previous year. 

“The global economy continues to grapple with a complex set of challenges: mounting debt, persistent underperformance in GDP (gross domestic product) growth, geopolitical tensions, and structural shifts in trade and investment flows,” said Rebeca Grynspan, secretary-general of UNCTAD. 

She added: “Global foreign direct investment contracted for the second consecutive year. International project finance, critical for large-scale infrastructure and development, registered the steepest decline, falling by 26 percent.” 

International project finance makes up a higher share of FDI in the least developed countries, which are therefore proportionally more affected by the downturn.

According to the analysis, the number of greenfield projects announced in industrial sectors increased by 3 percent year on year. However, their value fell by 5 percent to $1.3 trillion, still the second-highest on record. 

The value of cross-border mergers and acquisitions, which mostly affect FDI flows in developed countries, increased by 14 percent to $443 billion, still well below the average of the last decade. 

“While there has been some weakness in overall M&A markets, the share of cross-border deals in the total is declining, with domestic deals and near-market acquisitions becoming more important in the face of growing policy risks and regulatory scrutiny,” said UNCTAD. 

The report highlighted that the digital economy is the only sector to have seen growth in 2024, witnessing a 17 percent increase in project numbers and a doubling of initiative values. 

“The digital economy is expanding at an annual rate of 10 to 12 percent, outpacing global GDP growth and accounting for a rising share of value creation worldwide,” said Grynspan. 

She added: “Yet this growth is not equally distributed. Despite more than $500 billion in greenfield investment in the digital economy into developing countries over the past five years, this investment is heavily concentrated in a few countries.” 

The UNCTAD secretary-general further said that several structurally weak and vulnerable economies remain marginalized, constrained by inadequate technical infrastructure, limited digital skills, and policy and regulatory uncertainty. 

According to the report, investments aimed at achieving sustainable development goals also faced hurdles in 2024, as projects in renewable energy declined by 12 percent and those in critical minerals fell by almost 50 percent.

“What is most alarming, however, is the continued deterioration of investment flows into key sectors aligned with the Sustainable Development Goals,” said Grynspan. 

She added: “This trend comes at a time when the world can least afford to fall short. Reversing this negative trend in Goals investment will demand not only more capital — both public and private — but also deeper alignment of investment flows with long-term sustainability goals.”


Industrial cities in Saudi Arabia’s Qassim region hit 77% occupancy rate, official reveals

Updated 37 min 24 sec ago
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Industrial cities in Saudi Arabia’s Qassim region hit 77% occupancy rate, official reveals

RIYADH: Industrial cities in Saudi Arabia’s Qassim region are performing at occupancy rates of up to 77 percent, with 158 factories currently in operation, reflecting strong growth and a supportive business environment, according to a top official.

During a meeting organized by the the area’s chamber of commerce, the Kingdom’s Deputy Minister of Industry and Mineral Resources for Industrial Affairs Khalil Ibrahim bin Salamah explained that the value of industrial investments in the region during the first quarter of 2025 reached SR700 million ($186 million), with the city of Buraydah accounting for the largest share, the Saudi Press Agency reported.

This reflects the impact of the Kingdom’s National Industrial Strategy, introduced in October 2022, which aims to increase the number of factories in the Kingdom to approximately 36,000 by 2035. 

The SPA statement said: “The meeting aimed to introduce the most prominent ministerial services and programs and discuss the sector’s aspirations to achieve continued growth in development and investment.”

It added: “The meeting addressed several topics related to the industrial sector, including standard incentives for the industrial sector, which enhance the competitive sustainability of the industrial sector in the Kingdom.”

The statement further revealed that the assembly addressed the environmental impact of industrial facilities and presented solutions to help improve efficiency and quality.

It also included a review and introduction to the Factories of the Future Program, as well as the process of converting these facilities to adopt modern manufacturing practices, automation, and digitization, which directly contribute to the development of the industrial sector in the Kingdom.

The gathering also saw a review of the Industrial Links Program, which connects manufacturers with major projects to achieve the goals of the national strategy for increasing local content.

The Qassim region experienced 25 percent growth in its business sector over the past seven years, reflecting increased economic activity and contributing to the Kingdom’s goal of balanced development, the Ministry of Commerce reported in a post on its official X account in May.

The number of commercial records in the central region rose from 68,000 in 2018 to 85,000 by the end of the first quarter of this year, the ministry said at the time. 

In 2024, Qassim Municipality announced that the region had successfully concluded 711 investment contracts, with a total value exceeding SR740 million. The municipality also provided 1050 diverse investment opportunities aimed at supporting economic development and enhancing the quality of life in the region.

The increase comes as the Kingdom pushes ahead with its economic diversification strategy, aiming to increase the private sector’s share of the gross domestic product from 40 percent to 65 percent by 2030.


Chinese JD Logistics launches first regional hub in Riyadh to speed up deliveries

Updated 2 min 59 sec ago
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Chinese JD Logistics launches first regional hub in Riyadh to speed up deliveries

RIYADH: China’s JD Logistics has launched a regional operations center in Riyadh, enabling same-day and next-day deliveries across Saudi Arabia through its self-operated express service, JoyExpress.

The new 8,000-sq.-meter smart warehouse — JD’s first in the region — will serve as a logistics base for its business-to-consumer delivery network, supported by advanced automation and a robust supply chain infrastructure, the company said in a press release. 

The facility is expected to meet rising consumer demand in Saudi Arabia, with a report released in April by Research and Markets showing that the Kingdom’s e-commerce market is expected to grow at a compound annual growth rate of 12.10 percent during the period from 2025 to 2033, to reach $68.94 billion.

Rayan Al-Bakri, deputy minister for Logistics Services at Saudi Arabia’s Ministry of Transport and Logistics Services, said: “JINGDONG Logistics’ investment in Saudi Arabia aligns with our national vision to become a global logistics hub.”  

He added: “We welcome the company’s advanced self-operated express delivery services, which we believe will not only elevate service standards in the Kingdom but also create new opportunities for employment, innovation, and industry development in support of Vision 2030.” 

Saudi Arabia’s National Logistics Strategy aims to position the Kingdom as a leading global logistics hub by enhancing infrastructure, fostering economic growth, and ensuring integration across various modes of transport. 

During the launch, JD Logistics Vice President Wang Ying announced that the company’s services will cover most regions of the Kingdom, the Saudi Press Agency reported. 

Saudi Arabia’s courier, express, and parcel market is expanding rapidly, fueled by a digitally savvy population and the ongoing rise of e-commerce. 

According to a report by Mordor Intelligence, the Kingdom’s CEP market is projected to grow at a compound annual growth rate of 6.48 percent from 2025 to 2030, with the B2C segment already comprising 56 percent of the market value in 2024. 

“The launch of JoyExpress marks a key milestone in JD.com’s international journey and business development in Saudi Arabia,” said Charlie Peng, head of Middle East at JD Logistics. 

He added: “JINGDONG Logistics will provide leading edge services to our customers in Saudi Arabia and importantly, align with Saudi Arabia’s Vision 2030 strategy with its focus on logistics and job creation.” 

The launch comes amid a broader wave of international investment in Saudi Arabia, aligned with the Kingdom’s regional headquarters program. 

The initiative offers incentives including a 30-year corporate income tax exemption, withholding tax relief, and regulatory support for multinationals operating in the Kingdom. 

In March, SPA reported that 600 foreign companies have established regional headquarters in the Kingdom since 2021. 

Notable firms include BlackRock, Northern Trust, and Bechtel, as well as PepsiCo, IHG Hotels & Resorts, PwC, and Deloitte.