Saudi Arabia’s residential landscape changing as smart cities rise

ROSHN is the first developer in the region to receive the BSI Kitemark for smart cities, underlining its commitment to creating sustainable and smart communities to enhance the experience of both residents and visitors. Supplied
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Updated 25 August 2024
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Saudi Arabia’s residential landscape changing as smart cities rise

  • Saudi Arabia was represented five times in the 2024 edition of the International Institute for Management Development Smart City Index

RIYADH: The evolution of smart cities in Saudi Arabia could change the residential landscape of the Kingdom, as high-net-worth individuals discover these communities are perfect destinations for setting up homes, according to experts. 

Smart cities integrate artificial intelligence alongside information and communications technology to derive actionable insight from infrastructure, systems and processes to enhance the quality of life and safety for citizens. 

Saudi Arabia was represented five times in the 2024 edition of the International Institute for Management Development Smart City Index — with Riyadh, Madinah, and Makkah making the list along with Jeddah and Al-Khobar. 

With the $500 billion giga-project of NEOM set to lead the way with smart technology, it is no surprise the number of high-net-worth individuals flocking to Saudi Arabia is set to rise, with a report released by Henley & Partners in June projecting over 300 millionaires would be moving to the Kingdom in 2024.

Speaking to Arab News, Akram Awad, partner at Boston Consulting Group highlighted the important role smart cities will play in this area, as both a necessity and an opportunity for transforming the Kingdom’s residential landscape. 

“The rise of smart cities in Saudi Arabia is set to significantly boost the region’s attractiveness for high net-worth individuals seeking new homes. According to BCG’s 2023 Cities of Choice study, cities prioritizing quality of life, economic opportunities, and rapid adaptability to change are the most desirable,” said Awad. 

Awad noted that the Kingdom’s ambitious smart city projects, like NEOM and the ongoing transformation of Riyadh, could revolutionize the residential sector by using advanced technologies to enhance urban living. 

“These cities are designed to provide a superior quality of life through efficient resource management, reduced traffic congestion, and improved safety, making them highly appealing to HNWIs,” added Awad. 

Elias Abou Samra, CEO of RAFAL Real Estate Co. echoed similar views and said that high-net-worth individuals prefer smart cities due to remote access, efficient use of energy and cost savings. 

“Smart cities will form a major enabler for HNW international investors as they offer a high level of visibility and transparency with regards to their assets starting from the due diligence phase pre-purchase up to the operating phase,” he said. 

Saudi Arabia’s transforming residential landscape

In April, Saudi Arabia’s capital city Riyadh secured 25th place in the IMD Smart City Index, up five spots since 2023.

The assessment, which evaluates various structures and technologies in the city, underscored Riyadh’s strengths in health and safety, mobility, and governance.

Riyadh’s growth in these areas is being fueled by the work of Saudi Arabia’s largest multi-asset developer ROSHN.

The Public Investment Fund-owned giga-project signed a raft of agreements at the tech conference LEAP 2024 in March, with a focus on using innovation to make the developer’s homes smarter. 

ROSHN is the first developer in the region to receive the BSI Kitemark for smart cities, underlining its commitment to creating sustainable and smart communities to enhance the experience of both residents and visitors. 

Speaking to Arab News, ROSHN’s Senior Director for Sustainability Waleed Al-Ghamdi explained how the company is looking to integrate a smart operating model to manage its communities. 

“Planning for sustainability and integrating smart technology is a key dimension of what we do as a real estate developer, and ROSHN’s communities are designed to enhance the quality of life through using smart sustainable practices to reduce our ecological footprint and improve social equity,” said Al-Ghamdi. 

He added: “ROSHN is committed to setting new standards and raising the bar for the Kingdom’s real estate sector in line with Saudi Vision 2030’s objectives.”

Al-Ghamdi further pointed out that the developer is exploring opportunities to implement technology in its infrastructure to reduce energy, and water consumption, and improve mobility & connectivity for residents. 

“We can achieve a double-digit reduction in consumption, by using energy-efficient systems and by reusing resources such as water for irrigation. We’re also looking to make our communities future-ready, by both installing and providing provisions for EV chargers in public and private areas, as well as providing digital platforms and micro-mobility solutions for all,” said Al-Ghamdi. 




Akram Awad, partner at Boston Consulting Group highlighted the important role smart cities will play. (Supplied)

Smart cities to enhance public safety

It is not just inside the home that will benefit from the rise of smart cities.

Traffic congestion, along with raising public safety, also benefit from the innovations on offer in such developments.

“As urban areas such as Riyadh continue to grow rapidly, implementing smart city solutions becomes crucial in addressing the challenges accompanying such expansion. These solutions offer innovative ways to manage traffic congestion, enhance the delivery of municipal services, and ensure the safety of a diverse and growing community,” said Boston Consulting Group’s Awad. 

He noted that smart cities in Saudi Arabia can significantly improve the management of essential resources like energy and water, ensuring efficient and sustainable use. 

They will also create more livable and inclusive environments by leveraging data to tailor services to the specific needs of residents, promoting a sense of community, and fostering economic opportunities. 

RAFAL Real Estate Co. CEO Samra noted that smart cities will become even more effective with the implementation of AI. 

“Future cities will resemble living organisms with optimized connectivity among residents, visitors, service providers, weather effects, public realms, and institutions. This may extend to automatic response to all sorts of hazards and incidents,” he said. 

Awad added that AI can also optimize traffic light management to reduce congestion, enable proactive crowd management, and detect visual pollution issues like graffiti and potholes through advanced image recognition. 

Combating the risks

Even though smart cities will make life smoother and easier, their developments are not without risk.

Federico Pienovi, chief business officer and CEO for APAC and MENA at software firm Globant said it is crucial to prioritize AI safety and data privacy as the foundation for all other capabilities in smart cities. 

“A key challenge is that citizens are often unaware of the extent of data collection through sensors and devices. Addressing this gap requires proactive communication, public education initiatives, and transparent disclosure of data practices. Additionally, outdated technology and inefficient security protocols expose smart cities to malicious threats,” Pienovi told Arab News. 




Federico Pienovi, chief business officer and CEO for APAC and MENA at software firm Globant. Supplied

He added: “To combat these risks, cities must invest in modern cybersecurity measures, regularly update systems, and foster a culture of security awareness among both officials and residents.” 

Awad said that mechanisms such as robust data lineage systems document the use of personal data, centralized data privacy agreements, and integrated anonymization capabilities are essential to ensure the privacy of data in smart cities. 

“These measures ensure that personal data is handled responsibly and transparently, maintaining public trust while leveraging data for urban improvement. By prioritizing security and privacy, smart cities can safeguard their residents while enhancing the quality of urban living through advanced technology,” he added.


Lebanon’s inflation rate drops to 45% in 2024, marking a return to double-digit figures

Updated 23 January 2025
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Lebanon’s inflation rate drops to 45% in 2024, marking a return to double-digit figures

  • Monthly inflation also increased by 2.38% in December, marking the third consecutive monthly rise
  • Key contributors included miscellaneous goods and services, which rose 39.69% annually

RIYADH: Lebanon’s economic landscape showed signs of stabilization in 2024, with inflation rates returning to double-digit levels after three years of hyperinflation that had exceeded 200 percent.

The annual inflation rate stood at 45.24 percent last year, a substantial drop from the staggering 221.3 percent recorded in 2023, according to data from the Central Administration of Statistics.

Lebanon has endured prolonged economic instability, with the Lebanese lira losing 90 percent of its value since the crisis began in 2019. The drop in inflation aligns with the International Monetary Fund’s October forecast, which projected inflation in the Middle East and North Africa region to ease to 3.3 percent in 2024.

Last year represented a period of relative calm in terms of price volatility. Monthly inflation indices revealed a deceleration in price growth. The index for December reached 30,936.02, compared to 30,147.41 in November, showing a modest increase compared to the unpredictable fluctuations of prior years.

The slowdown in inflation is largely due to the stabilization of the Lebanese lira, driven by Banque du Liban’s monetary policies since 2023. By the spring of last year, the exchange rate had settled at around 89,500 Lebanese liras per dollar, following a sharp rise from 40,000 to 140,000 earlier in 2023.

This stability helped bring annual inflation below 100 percent in April, reaching 18.1 percent by December, though the same month’s inflation rose slightly from November’s 15.38 percent.

Monthly inflation also increased by 2.38 percent in December, marking the third consecutive monthly rise, following 2.02 percent in October and 2.30 percent in November. 

Key contributors to inflation in December included miscellaneous goods and services, which rose 39.69 percent annually, education fees at 31.27 percent, and health care at 22.93 percent. Only communications and furniture saw price declines at 2.99 percent and 1.99 percent, respectively.

Lebanon’s state-owned telecom firm, Ogero, said it is working to restore and expand its connectivity. The firm’s Chairman and Director General Imad Kreidieh announced in a live broadcast on Jan. 21 that the company’s expansion plans will resume, supported by funding from multiple donors.

North Lebanon recorded the highest monthly increase in December at 3.79 percent, followed by Beirut and Nabatieh at 3.59 percent, and South Lebanon at 2.97 percent.

The drop in inflation offers some relief to the Lebanese people, but with the election of former army commander Joseph Aoun as president on Jan. 9 and the appointment of the Chief Judge of the International Court of Justice, Nawaf Salam, as prime minister on Jan. 13, the need for comprehensive reform remains urgent.

The political breakthrough has also sparked a rally in Lebanon’s government bonds, which have nearly tripled in value since September. The election of Aoun, following 12 failed attempts to choose a president, has raised hopes that Lebanon might finally address its economic challenges. 

Most of the country’s international bonds, in default since 2020, rallied further after Aoun’s election, rising by nearly 0.9 cents on the dollar to around 16 cents — a modest recovery that underscores investor optimism despite Lebanon’s ongoing struggles.


Saudi Arabia’s Kingdom Holding terminates $1.8bn fund deal with Sumou, JEC

Updated 23 January 2025
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Saudi Arabia’s Kingdom Holding terminates $1.8bn fund deal with Sumou, JEC

JEDDAH: Saudi-based conglomerate Kingdom Holding Co. has confirmed the termination of its SR6.8 billion ($1.8 billion) fund agreement with Sumou Holding Co. and Jeddah Economic Co., following a mutual decision by all parties.

In a filing with the Tadawul stock exchange, KHC said the move, effective Jan. 23, imposes no obligations on any party, adding that this decision was reached as the primary purpose of the fund is no longer applicable.

Progress continues on the fund’s main asset, Jeddah Tower, with the Saudi Binladin Group reinstated and work resuming at an accelerated pace. Technical and consulting teams are now in place and have commenced on-site operations.

The release added that the Alinma Jeddah Economic City Fund, fully owned by JEC – an associate firm – remains operational, saying that KHC continues to support the project’s development.

In July, the three firms signed an agreement to establish a new fund to acquire the Alinma Jeddah Economic Fund, whose investors would include the three companies, with KHC owning 40 percent of the new fund.

In a Tadawul announcement, KHC said last year that the financial impact of the agreement would be disclosed once JEC completed updating its accounting records.

The latest announcement said the concrete was poured for the 64th floor of the tower in the presence of the partners, headed by Prince Alwaleed bin Talal, KHC’s chairman of the board of directors.

It added that the partners were giving their utmost attention and oversight to this global symbol, which aligns with Saudi Vision 2030.

Jeddah Economic City aims to showcase its pioneering ambitions through the Jeddah Tower, envisioned as a new wonder of the world and a symbol of Jeddah’s renaissance. The tower also reflects the city’s rich commercial heritage spanning thousands of years, according to the company’s website.

Set to stand over 1 km. tall, the tower will be the centerpiece of the Jeddah Tower Waterfront District.


Qatar strengthens fiscal position with $245m budget surplus in Q4 

Updated 23 January 2025
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Qatar strengthens fiscal position with $245m budget surplus in Q4 

RIYADH: Qatar recorded a budget surplus of 900 million Qatari riyals ($245.6 million) in the fourth quarter of 2024, up from 100 million riyals in the previous quarter. 

The Ministry of Finance stated on its X account that the surplus will be used to reduce public debt. It added that total expenditures for the quarter stood at 47.8 billion riyals, a 12 percent year-on-year decline, while revenues totaled 48.7 billion riyals, reflecting a 12.5 percent drop. 

The health, municipal and environment, general secretariat, and energy sectors ranked as the top-performing areas during the quarter, according to the Sector Performance Index.  

Qatar’s fiscal performance aligns with other Gulf Cooperation Council nations, such as Oman, which recorded a 6.2 percent budget surplus in 2024. This reflects the International Monetary Fund’s December review, which highlighted the region’s resilience amid oil production cuts, supported by diversification efforts and economic reforms. 

“For the second consecutive year, and in line with Qatar’s continued dedication to developing health and education, allocations for the two sectors have increased, with both amounting to 20 percent of the total new budget,” the ministry said. 

Government tenders and auctions during the quarter were valued at 6.4 billion riyals, while contracts with local companies totaled 4.8 billion riyals, a 36.8 percent decline compared to the same period in 2023. 

The 2024 state budget prioritized significant investments in healthcare, with 11 percent of total expenditures allocated to the sector. Key projects include the development of the National Cancer Hospital, a specialized psychiatric hospital, and upgrades to existing healthcare facilities. 

In the third quarter of 2024, Qatar’s budget surplus declined by 97.4 percent compared to the second quarter. Total revenues for that period were 51.3 billion riyals, driven by oil and gas revenues of 42.3 billion riyals, which fell 25.4 percent year on year due to fluctuating market conditions. 

Non-oil revenues, however, showed strong growth, rising 76.8 percent year on year from a lower base. 

Expenditures totaled 51.2 billion riyals in the third quarter, a 2.8 percent increase compared to the same quarter in 2023, with notable spending on salaries, wages, and minor capital expenditures. 

The government prioritized debt reduction during the period, in line with its fiscal strategy. Public debt stood at 332.4 billion riyals, equivalent to 38.6 percent of nominal gross domestic product. 


Saudia sets new heights in 2024, flying 20m international passengers with 16% growth

Updated 23 January 2025
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Saudia sets new heights in 2024, flying 20m international passengers with 16% growth

  • Saudia reported an 18% increase in transit guests compared to the previous year, surpassing 9.3 million passengers
  • It carried 35 million guests throughout 2024, reflecting a 15% year-on-year increase

JEDDAH: Saudi Arabia’s national flag carrier Saudia reported a 16 percent year-on-year rise in its international passenger numbers in 2024, reaching 20 million, highlighting its growth and operational success.

Saudia also reported an 18 percent increase in transit guests compared to the previous year, surpassing 9.3 million passengers, according to its performance report statement, released on Jan. 23.

The growth reflects the carrier’s efforts to strengthen global connections to the Kingdom, supporting the ambitious goals of Saudi Vision 2030 in tourism, entertainment, sports, and the Muslim Hajj and Umrah pilgrimages.

According to the International Air Transport Association, the Middle East’s air travel market continued its strong recovery in November, with passenger demand increasing by 8.9 percent compared to the same month in 2023.

While this growth was robust, it was slightly ahead of the global trend, which saw an 8.1 percent increase in total passenger demand.

 

The region’s performance was part of a broader international trend, where the Middle East, alongside Europe and Asia-Pacific, led the way in demand growth. However, airlines in the region continue to face challenges in aircraft supply, preventing them from fully meeting growing demand and improving their services, IATA said in a statement released earlier this month.

Major international markets in the Middle East experienced a notable increase in traffic demand, driven by the strong performance of the region’s largest aviation hubs, despite some countries facing challenges from geopolitical conflicts, according to IATA.

Ibrahim Al-Omar, the director general of Saudia Group, said that success in the competitive aviation industry requires a continuously evolving strategy, adding that the airline remains committed to achieving sustainable operational excellence while upholding the highest international standards.

“This remarkable growth is a testament to the dedication and hard work of Saudia’s employees and the strategic optimization of our aircraft fleet to deliver exceptional service. We have also made significant strides in enhancing our services and enriching the overall guest experience,” he said.

In its report, Saudia said that it carried 35 million guests throughout 2024, reflecting a 15 percent year-on-year increase.

The airline reported operating 193,000 scheduled and additional flights last year, reflecting a 10 percent increase from the year before, adding that it also achieved an 8.5 percent rise in flight hours, totaling over 581,000, while maintaining an on-time performance rate of 89.1 percent, marking a 2.7 percent improvement.

The company’s customer satisfaction metric showed a 32.7 score, reflecting a 4.5 percent increase compared to 2023, according to the statement.

Saudia said it saw a notable increase in guest engagement through modern technologies as part of its ongoing digital transformation. It noted a 40 percent rise in usage of the Saudia app, while the Government Digital Wallet, GovClick, drove an impressive 324 percent growth in digital service adoption.

The company’s futuristic plans include strengthening its operational model, particularly during peak travel seasons, by expanding its fleet, increasing seat capacity, and broadening its global network.

With a current fleet of 147 aircraft, the airline aims to add 118 new planes in the coming years as part of its growth strategy.


Closing Bell: Saudi main index slips to close at 12,354

Updated 23 January 2025
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Closing Bell: Saudi main index slips to close at 12,354

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, losing 8.35 points, or 0.07 percent, to close at 12,354.04. 

The total trading turnover of the benchmark index was SR6.67 billion ($1.77 billion), as 112 of the stocks advanced and 114 retreated.  

Similarly, the Kingdom’s parallel market Nomu lost 154.28 points, or 0.50 percent, to close at 30,846.59. This comes as 32 of the listed stocks advanced while 49 retreated.  

The MSCI Tadawul Index also lost 1.64 points, or 0.11 percent, to close at 1,543.38.  

The best-performing stock of the day was Almoosa Health Co., whose share price surged 10 percent to SR154. 

Other top performers included Al Jouf Cement Co., whose share price rose 8.22 percent to SR12.90, as well as Northern Region Cement Co., whose share price surged 6.56 percent to SR9.91.

Saudi Reinsurance Co. recorded the most significant drop, falling 2.90 percent to SR60.20, while Middle East Specialized Cables Co. also saw its stock prices fall 2.67 percent to SR45.60. 

Kingdom Holding Co. recorded a drop of 2.42 percent to SR9.29.

On the announcements front, Riyad Bank has completed the offer of its SR-denominated additional tier 1 capital sukuk under its Additional Tier 1 Capital Sukuk Program, which is worth SR10 billion. 

According to a Tadawul statement, the total number of sukuk is 800, with the value of the offer standing at SR2 billion. The statement also showed that while the par value is SR250,000, the return is 6 percent per annum.

Riyad Bank ended the session at SR29.60, with no percentage change in price.

Albilad Capital has rebalanced the sukuk basket for the Albilad Saudi Sovereign Sukuk ETF to align with the components of the index. According to a bourse filing, the rebalancing took place on Jan. 22.

Albilad Capital ended the session at SR8.30, with no percentage change in price.

Saudi Arabian Cooperative Insurance Co. has decreased its accumulated losses to 0 percent of the capital. According to a Tadawul statement, this move is mainly attributed to the use of SR39 million out of the total statutory reserve balance amounting, to SR43 million to extinguish the firm’s accumulated losses. 

The company highlighted that the use of the company’s statutory reserve has no impact on its financial obligations.

Saudi Arabian Cooperative Insurance Co. ended the session at SR16.70, up 1.24 percent.

Arabian Plastic Industrial Co. has signed a contract with Badael Co., a Public Investment Fund firm, to manufacture and supply plastic containers for 3 years. 

A bourse filing revealed that the agreement value exceeds 5 percent of the company’s total revenues according to the audited annual financial statements for the year 2023. The filing also indicated that the financial impact of the deal is forecasted to be reflected positively on the financial statements starting from the first half of 2025.

Arabian Plastic Industrial Co. ended the session at SR37, up 1.23 percent.