Saudi Arabia increasingly attractive to investors: BlackRock official

Special Saudi Arabia increasingly attractive to investors: BlackRock official
In August, BlackRock signed a memorandum of understanding in New York with the Saudi Real Estate Refinance Co. Shutterstock
Short Url
Updated 11 September 2024
Follow

Saudi Arabia increasingly attractive to investors: BlackRock official

Saudi Arabia increasingly attractive to investors: BlackRock official

JEDDAH: Saudi Arabia is drawing attention from local and international investors as the Kingdom continues to prosper, according to a top global asset management company official.

In an interview with Arab News, BlackRock’s Managing Director, Head of Middle East Client Business and CEO Saudi Arabia Yazeed Al-Mubarak, said that the global client base has shown a growing interest in gaining exposure to Middle Eastern assets. 

He also underlined that regional investors are increasingly seeking more appealing opportunities within the local market.

“As Vision 2030 and its accompanying capital investment comes to life, Saudi Arabia has become an increasingly attractive destination for local and international investment,” Al-Mubarak said.

In August, BlackRock signed a memorandum of understanding in New York with the Saudi Real Estate Refinance Co., fully owned by the Kingdom’s sovereign wealth fund. 

The signing occurred during an official visit to the US by Saudi Arabia’s Minister of Municipalities and Housing Majid Al-Hogail.

The deal seeks to develop the real estate finance sector in the Kingdom and increase the share of businesses in the industry’s capital markets.

The agreement was signed by SRC CEO Majid Al-Abduljabbar and Al-Mubarak in the presence of BlackRock President Robert Kapito.

Al-Mubarak said that SRC is leading the way in developing mortgage refinancing solutions for Saudi banks and housing finance companies, enabling global institutional investors to engage with this expanding and high-quality fixed-income asset class.

Commenting on his company’s memorandum with SRC, the CEO said the announcement is an agreement to develop a high-quality fixed-income asset class of mortgage-related securities.

Providing insight on how BlackRock foresees this partnership impacting the real estate finance market in the Kingdom, he said that the Saudi housing sector is experiencing rapid growth due to population expansion, urbanization, and proactive government initiatives.

“Central to this growth is the Housing Program under Vision 2030 that aims to increase homeownership to 70 percent by 2030,” he said.

He added: “The mortgage market has quadrupled in size over the last five years, exceeding $150 billion and expected to further grow to nearly $200 billion. Prior year’s momentum slowed in 2022-2023 due to house price appreciation, rising mortgage rates, and a significant reduction in historical subsidy programs.”

Al-Mubarak further said that to support this growth and bank lending, SRC is looking to issue securitizations locally and internationally to provide additional funding capacity and contribute to the development of the Saudi debt capital markets.




Larry Fink, chairman and CEO of BlackRock, with Yazeed Al-Humied, deputy governor and head of MENA investments at PIF, in April at the launch of BlackRock Riyadh Investment Management. PIF

Commenting on how this collaboration aligns with the Kingdom’s Vision 2030 and what role his firm sees itself playing in achieving these goals, the managing director pointed to BlackRock Riyadh Investment Management, or BRIM – launched in April with an initial investment mandate of up to $5 billion from PIF.

The company – dubbed the first-of-its-kind in the Kingdom by BlackRock’s CEO Larry Fink when it was announced –  will further develop Saudi Arabia’s asset management sector, including the housing capital markets, and provide a broad range of attractive backing strategies for Middle Eastern and global clients. 

“BRIM will encompass investment strategies across a range of asset classes for the Saudi market, including both public and private markets, managed by a Riyadh-based investment team,” Al-Mubarak told Arab News.

He added that the guarantee offering provided by the Saudi Mortgage Guarantee Services Co., or Damanat, fully owned by the Saudi Real Estate Development Fund, will now act as an enabler for BRIM’s mortgage-focused fixed income strategies.

Speaking of the long-term goals of this partnership, Al-Mubarak said that these include the development of the Kingdom’s mortgage securitization framework, as well as related investment strategies to enable investors to access this market.

Al-Mubarak discussed his company’s initial partnership with SRC and the Ministry of Municipalities and Housing, stating that while there are no firm plans at this stage, his company is enthusiastic about working with both entities on future projects.


Experts highlight real estate financing, foreign investment at Saudi forum

Experts highlight real estate financing, foreign investment at Saudi forum
Updated 24 sec ago
Follow

Experts highlight real estate financing, foreign investment at Saudi forum

Experts highlight real estate financing, foreign investment at Saudi forum

RIYADH: Experts at the Real Estate Future Forum emphasized the evolving landscape of property financing in Saudi Arabia, pointing to strong bank portfolios, public-private partnership opportunities, and a focus on foreign investment.

The Managing Director and Partner at Watheeq Financial Services, Ibrahim Al-Alwan, highlighted the rising significance of property financing for financial institutions: “Today, we see that banks’ portfolios in real estate financing are very high. The process involves regulation, management, and the implementation of effective tools for investment and financing.”

Joe Jabbour, managing director and partner at Boston Consulting Group, underlined the vast potential for PPPs, particularly in utilities, social, and civil infrastructure, facilitated by government offtake agreements.

“I must say that most of the investments that are being structured and are being prepared for the market, have the foreign investors in mind,” Jabbour said. 

On its second day, the forum explores the key trends shaping Saudi Arabia’s real estate sector as it advances toward Vision 2030 goals.

The inaugural day included industry leaders, policymakers, and investors who discussed the Kingdom’s ongoing focus on property development, investment strategies, and tourism expansion.

Governor of Asir Region Prince Turki Bin Talal said during a panel that the Public Investment Fund has nine projects in development, with four already launched and five underway in the region. 

The governor also said that Asir has between 6,000 and 8,000 approved and licensed hotel rooms. In line with this momentum, he also announced that the Ministry of Sports has officially recognized Abha’s World Cup bid as the best in the Kingdom.

A key highlight from the first day was the Capital Market Authority’s announcement permitting foreign investment in Saudi-listed companies that own real estate in Makkah and Madinah.

“On behalf of the CMA, we congratulate these companies,” CMA’s Chairman Mohammed El-Kuwaiz said.

The Real Estate Future Forum, taking place from Jan. 27 to 29 at the Four Seasons Hotel in Riyadh, serves as a global platform for shaping the industry’s future. Uniting over 300 speakers from 85 countries, the event explores innovations, sustainability initiatives, and investment strategies under the theme “Future for Humanity: Shaping Dreams into Reality.”

The upcoming event days are set to provide an outlook on integrating advanced technologies into the real estate sector, with panels diving into emerging trends like virtual reality for property marketing, the role of the metaverse in digital real estate, and the use of robotics and 3D printing in construction.


Abu Dhabi property deals up 24.2% in 2024 as foreign investment soars

Abu Dhabi property deals up 24.2% in 2024 as foreign investment soars
Updated 10 min 24 sec ago
Follow

Abu Dhabi property deals up 24.2% in 2024 as foreign investment soars

Abu Dhabi property deals up 24.2% in 2024 as foreign investment soars

JEDDAH: Abu Dhabi’s real estate market experienced a 24.2 percent year-on-year growth in 2024, with a total of 28,249 transactions, driven by sustained demand, strategic projects, and a focus on market transparency, official data revealed. 

The Abu Dhabi Real Estate Center reported that the UAE capital saw a 10.45 percent increase in transaction value, reaching 96.2 billion dirhams ($26.19 billion) in 2024. The sector recorded 16,735 sales transactions valued at 58.5 billion dirhams and 11,514 mortgage deals worth 37.7 billion dirhams. 

The market’s growth comes amid Abu Dhabi’s ongoing efforts to develop a transparent property market aimed at attracting both local and global investors. This strategy helped the city secure a spot among the top five global improvers in the 2024 Global Real Estate Transparency Index, compiled by property consultancy JLL. 

This trend is part of a broader regional push, with property markets in Saudi Arabia, Qatar, and the UAE undergoing reforms to better cater to global investor needs. Saudi Arabia, for instance, recently announced that foreigners can now invest in Saudi-listed companies owning real estate in Makkah and Madinah, following a landmark decision by the Kingdom’s Capital Market Authority. 

ADREC Acting Director Rashed Al-Omaira said Abu Dhabi’s inclusion in the GRETI underscores its “commitment to fostering transparency and trust within the sector.” 

“The sustained growth of Abu Dhabi’s real estate market over the past decade reflects a strategy that prioritizes market stability,” he added. 

ADREC also launched 38 new off-plan projects and completed 12 major developments in 2024, with the center adding that these projects were selected to offer a diverse range of options, designs, and price points, catering to a broad spectrum of investors. 

The market also saw a notable increase in foreign direct investment, which grew by 125 percent year on year, with the sector attracting over 7.86 billion dirhams in 2024. This investment came from 2,302 investors across 105 countries, including the US, the UK, and Kazakhstan, as well as Russia, France, and China. 

“The surge in FDI highlights Abu Dhabi’s adaptability and resilience in an evolving global economy. It is a testament to the emirate’s forward-thinking policies, investment-friendly environment, and world-class infrastructure that ensure sustainable growth,” said Al-Omaira.   

This comes as real estate markets in other key UAE cities, including Dubai, Sharjah, and Ajman, saw significant transaction volume growth over the past year, driven by diverse investment opportunities and rising demand for various property types.

Official data from the real estate authorities across the four emirates revealed that the total value of real estate transactions reached approximately 893 billion dirhams by the end of 2024, with more than 331,300 transactions recorded. 

Al-Omaira stated that ADREC is committed to strengthening Abu Dhabi's position as a global investment hub and a model for urban living. 

“Our real estate sector is a cornerstone of the emirate’s economic vision, driving sustainable development and enhancing quality of life for residents through innovative, high-quality projects,” he added. 


Saudi Arabia’s NHC to offer affordable homes 20% below market rates, CEO says 

Saudi Arabia’s NHC to offer affordable homes 20% below market rates, CEO says 
Updated 54 min 11 sec ago
Follow

Saudi Arabia’s NHC to offer affordable homes 20% below market rates, CEO says 

Saudi Arabia’s NHC to offer affordable homes 20% below market rates, CEO says 

RIYADH: Saudi Arabia’s state-owned developer NHC will price units 20 percent below market rates as part of its strategy to meet the surging demand for affordable housing, revealed its CEO. 

In an interview with Arab News on the sidelines of the fourth Real Estate Future Forum in Riyadh, Mohammed Bin Saleh Al-Buty stated that the company will offer more than 140,000 housing units in 2025, starting at SR375,000 ($99,979), “which are very good prices, especially in Riyadh.” 

The company’s goals align with Saudi Arabia’s Vision 2030, which is seeking to address the rising housing demand driven by population growth and economic expansion. 

“Most of the demand is in Riyadh, where we see the highest pressure on prices. However, we are also addressing demand in 17 cities nationwide, ensuring both affordability and quality,” Al-Buty said.

He added: “The focus we have is because the demand is real ... if there is demand, we have to focus on that. But we did not miss other cities as well. We are serving other cities.”

This comes after the company launched NHC Innovation on the event’s first day, a technology-driven subsidiary focused on delivering innovative real estate and municipal solutions while advancing new technologies. 

Al-Buty emphasized the importance of the development, saying: “We became the largest real estate company and market leader, so we decided to spin off a subsidiary to drive innovation and enter a new era of providing AI services.”

He added: “We have more than 20 million clients in our database. The company was born big, and just in 2024, we had more than half a billion transactions. We also had over 3.5 billion visitors to the platform.”

Al-Buty also highlighted NHC’s efforts to proactively manage supply chain challenges by securing materials and contractors in advance. 

“We work with both local and international suppliers to secure materials for the next two to three years. This helps us keep costs manageable despite the rising demand in the market,” he said.

The CEO continued: “That initiative was really great for our partners as well. If we succeed in securing those materials for our project at the current cost, I think we’ve done a great job, and we’re even trying to acquire them at a lower cost.”

He added: “That’s because the overall development in the country is driving prices a bit higher, so we’re working to secure those materials on time and at the current cost.”

NHC, which aims to supply 300,000 housing units by 2025, is expected to host over 1 million residents by 2030. That figure is projected to double to nearly 2 million in subsequent years. 

Al-Buty reiterated NHC’s focus on delivering value to its clients. “We are creating unique opportunities for ownership and investment while ensuring our housing solutions meet the market’s needs.”


Abu Dhabi’s PureHealth agrees to buy 60% stake in Hellenic Healthcare

Abu Dhabi’s PureHealth agrees to buy 60% stake in Hellenic Healthcare
Updated 28 January 2025
Follow

Abu Dhabi’s PureHealth agrees to buy 60% stake in Hellenic Healthcare

Abu Dhabi’s PureHealth agrees to buy 60% stake in Hellenic Healthcare

DUBAI: Abu Dhabi’s PureHealth Holding has agreed to buy a 60 percent stake in Hellenic Healthcare Group, in a deal valuing the provider of private healthcare services in Greece and Cyprus at €2.2 billion ($2.31 billion).

CVC Capital Partners will retain a 35 percent stake in the business while HHG’s CEO Dimitris Spyridis will keep the remaining 5 percent stake, PureHealth said in a statement, without disclosing a timeline for the completion of the deal.

PureHealth, owned by Abu Dhabi sovereign wealth fund ADQ, has been investing in recent years to grow its portfolio and expand globally.

Last year, it acquired British hospital operator Circle Health Group for around $1.2 billion, while in 2022 it snapped a 26 percent stake in US firm Ardent Health Services.

“Integrating HHG into our portfolio not only reinforces our position in Europe but also creates significant value for our group by contributing to revenue diversification, driving operational synergies, and strengthening our financial performance,” said Shaista Asif, Group CEO at PureHealth, in a statement on the company’s website.

“This move aligns with our vision of becoming a global leader in healthcare, with more than 50 percent of our revenues originating outside the GCC.”

The deal will allow PureHealth to serve a further 1.4 million patients annually, it said, noting the move underscores the firm’s “ambition to diversify its revenue streams and enhance operational efficiencies.”

It is also another step in Abu Dhabi’s accelerating efforts to diversify its economy, as the UAE’s capital invests in fields like technology and health to cut reliance on oil revenues.

AI-powered health care company M42, backed by one of ADQ’s bigger peers Mubadala, last week announced a new operating structure to support more acquisitions and expansion into new markets.


Oil Updates — prices hover near two-week low; weak China data adds to demand concerns

Oil Updates — prices hover near two-week low; weak China data adds to demand concerns
Updated 28 January 2025
Follow

Oil Updates — prices hover near two-week low; weak China data adds to demand concerns

Oil Updates — prices hover near two-week low; weak China data adds to demand concerns

NEW YORK/SINGAPORE: Oil prices ticked up but hovered near a two-week low on Tuesday after weak economic data from China and warming weather forecasts elsewhere soured the demand outlook.

Brent crude oil futures rose by 42 cents, or 0.54 percent, to $77.5 per barrel by 7:30 a.m. Saudi time. US West Texas Intermediate crude futures were up 34 cents, or 0.46 percent, to $73.51. Brent settled on Monday at its lowest since Jan. 9, while WTI hit its lowest since Jan. 2.

China, the world’s largest importer of crude oil, reported on Monday an unexpected contraction in manufacturing activity in January, adding to concerns over global crude demand growth.

“The general tone of caution in the risk environment, coupled with weaker Chinese PMI numbers that cast further doubt on China’s oil demand outlook, may serve as a drag on oil prices,” IG analyst Yeap Jun Rong said.

China’s crude oil demand is also expected to be hit by the latest US sanctions on Russian oil trade. FGE analysts see refineries in Shandong losing up to 1 million barrels per day of crude supply in the near-term amid a ban imposed by the Shandong Port Group on US-sanctioned tankers.

“Alternative crude barrels (to Russian supply) are being sought after at the same time, but they come at much higher costs,” the analysts noted.

Several independent refineries in China have halted operations, or plan to do so, for indefinite maintenance periods, sources told Reuters, as new Chinese tariff and tax policies plunge plants deeper into losses.

India, the world’s third-largest crude importer, also faces disruptions to Russian oil supply, but refiners there are taking advantage of a wind-down period in the sanctions to make purchases until March, the FGE analysts said.

In the US, weather forecasts are for warmer-than-normal temperatures through this week, which is weighing on demand for heating fuels after extreme cold sparked a natural gas and diesel rally in prior sessions.

“Temperatures in both regions (US and Europe) are increasing, allowing for heating fuel demand to slide off some,” StoneX oil analyst Alex Hodes said on Monday.

Broader financial markets were under pressure from a surge of interest in a low-cost artificial intelligence model launched by Chinese firm DeepSeek.

“Losses (in the oil market) appear relatively limited from the turmoil in US tech stocks,” IG’s Yeap said.

Still, caution is likely to persist as the Feb. 1 deadline for US tariffs approaches, with any potential trade restrictions likely to introduce downside risks to global growth, which could translate to downward pressure on oil, Yeap added.