There has been growing interest from international developers to launch projects in Saudi Arabia amid new reforms in the real estate sector, experts said.
Developers from the UAE and Egypt are looking at “new opportunities” in the kingdom, Ramzi Darwish, head of Savills in Saudi Arabia, told The National on the sidelines of Cityscape Global in Riyadh.
“We’re probably going to see a decent amount of regional developers come into Saudi [Arabia] and there’s already a lot of interest, whether people that we talk to at Cityscape, or whether people that we talk to outside the event and also from international developers to try and partner with Saudi landowners and developers,” he said.
UAE companies, including Aldar and Arada, have previously said they are keen to start new projects in Saudi Arabia, the Arab world’s largest economy. Arada, a joint venture between KBW Investments – a company controlled by Saudi Arabia’s Prince Khaled bin Alwaleed and Sharjah-based Basma Group – is in talks with the kingdom’s sovereign wealth fund, the Public Investment Fund, to start a “significant size, mixed use, residential project” in the kingdom, its group chief executive Ahmed Alkhoshaibi told The National in September.
Meanwhile, the Trump Organisation and London-listed Dar Global have also launched two towers in the kingdom. UK-based Cheval Collection is also planning up to seven projects in Saudi Arabia over the next three years as part of its expansion plans in the kingdom.
“Developers will now need to design and build residential schemes to meet the criteria for both Saudi nationals and expats, because it’s different,” Mr Darwish said. “The expats want different things from Saudi nationals. … the quality and how stock looks like in the phase beyond January will change.”
Saudi Arabia is focusing on diversifying its economy away from oil and has introduced reforms spanning different sectors to boost foreign investment. It announced two key reforms in the real estate this year. Those include allowing foreign residents to buy property in designated areas of Riyadh and Jeddah, with “special requirements” for home ownership in Makkah and Madinah.
In August, it also introduced new land tax of up to 10 per cent on undeveloped land to spur the development of property projects and boost housing supply. The changes apply to plots spanning 5,000 square metres, within the approved urban boundaries, Saudi Arabia’s Ministry of Municipalities and Housing said.
It also introduced fees of between 5 per cent to 10 per cent on long-term vacant buildings.
Room to grow
Developers expect property sales to jump from next year “and are excited about the new opportunity”, said Shaun Macnamara, executive director of sales at Roshn.
Roshn Group, a subsidiary of the PIF, is a multi-asset developer with a land bank of more than 200 million square metres across Saudi Arabia. It is developing projects in Riyadh, Jeddah, Makkah and Dhahran.
“The interest that we’ve already seen from premium residency holders shows that there is a very good appetite to … invest into Saudi Arabia,” Mr Macnamara said. “It’s a fantastic opportunity … what we are delivering to the market will be open to more buyers.”
Last year, Saudi Arabia introduced premium residency visas to attract skilled professionals and investors. The visas provide a variety of benefits, including the ability to conduct business, own real estate and obtain work permits for holders and family members.
Premium residency holders made up 5 per cent of Roshn’s total buyer profile last year, Mr Macnamara said, without disclosing total sales achieved by the company.
Thara, a debt crowd lending platform in Saudi Arabia, expects more opportunities to finance real estate projects in the kingdom as the market opens up. “We provided finance worth up to 57 million Saudi riyals [$15.2 million] to real estate developers in the last one year and we expect to reach 100 million riyals by the end of the year as many developers are looking to expand their business,” said sales manager Mansoor Alenezi. “There are many small developers who are looking to be big developers and are looking for finance.”
The company, which obtained a licence from the Saudi Central Bank, provides finance starting from one million riyals to 30 million riyals, which can be repaid in three years time. The platform connects individuals and institutional investors to fund real estate projects in the kingdom.
COPA DEL REY
Semi-final, first leg
Barcelona 1 (Malcom 57′)
Real Madrid (Vazquez 6′)
Second leg, February 27
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
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Zayed Sustainability Prize
Zayed Sustainability Prize
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Company%20profile
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UAE currency: the story behind the money in your pockets
Tamkeen’s offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Oscars in the UAE
The 90th Academy Awards will be aired in the UAE from 3.30am on Monday, March 5 on OSN, with the ceremony starting at 5am
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Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don’t max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
Company%20profile
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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain – refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
