Saudi Arabia opens first phase of Sports Boulevard

RIYADH: Sustainable aviation fuel will be used in Saudi Arabia for the first time after a deal was struck for airplanes using Red Sea International Airport.

An agreement between Red Sea Global, daa International, and Arabian Petroleum Supply Co. will see the airport supplied with a 35 percent SAF blend, cutting direct aircraft emissions by up to 35 percent. 

The deal marks a significant step in reducing aviation-related carbon emissions in the Kingdom, according to a press release. 

This aligns with the company’s goal to power all operations at the Red Sea with renewable energy. It has already installed over solar panels capable of producing 400 megawatts, which is expected to offset up to 600,000 tonnes of carbon dioxide equivalent annually. 

John Pagano, Group CEO of Red Sea Global, said that by introducing SAF to the Kingdom, the company is significantly reducing guests’ personal carbon footprints from the moment they arrive and even after they depart. 

“More than this, we’re supporting the wider aviation sector to start making choices that are better for the environment,” he added. 

SAF is a lower-carbon alternative to traditional jet fuel, designed to reduce greenhouse gas lifecycle emissions. It can be produced from renewable sources, waste-derived materials, or synthesized from clean hydrogen and captured carbon dioxide.  

In accordance with international standards set by the International Civil Aviation Organization and the International Air Transport Association, SAF must be blended with conventional Jet A1 fuel.  

Aviation fuel significantly impacts sustainability, with the industry contributing about 2.5 percent of global carbon emissions annually.  

SAFs can reduce emissions by up to 80 percent but currently account for less than 0.1 percent of jet fuel used by major US airlines.  

Challenges include high production costs and limited availability, hindering widespread adoption. 

“Introducing sustainable aviation fuel at Red Sea International Airport marks a significant milestone in our commitment to environmental stewardship and sustainability. This groundbreaking initiative not only reduces carbon emissions but also aligns with our broader mission to protect the Red Sea’s unique and fragile ecosystem,” said Michael White, chief commercial officer at RSI. 

RSG’s commitment to sustainability extends beyond aviation fuel. Its subsidiary air operator, Fly Red Sea, will exclusively refuel its seaplane fleet with SAF and lower-carbon aviation fuel.  

Additionally, RSG has committed to planting and restoring 50 million mangroves by 2030 to enhance carbon sequestration and biodiversity in collaboration with the National Center for Vegetation Cover.  

The Red Sea welcomed its first guests in 2023, with five hotels now open. RSI has been receiving regular domestic flights since September 2023, and international flights began in April with a twice-weekly route to Dubai International Airport.  

Upon full completion in 2030, the Red Sea will feature 50 resorts, offering up to 8,000 hotel rooms and over 1,000 residential properties, alongside marinas, golf courses, entertainment venues, and leisure facilities. 

RIYADH: Residential transaction values in Saudi Arabia surged 35 percent over the past 5 years to reach SR164.8 billion ($43.94 billion), according to a report from Knight Frank.

The findings showed that these deals, which accounted for 61.5 percent of all real estate agreements by total value, registered a 38 percent increase in the number of sales to just under 202,661 during the same period.

This falls in line with the Kingdom’s Vision 2030 goal to reach a 70 percent homeownership rate by 2030. It also aligns well with Saudi Arabia’s commitment to supporting access to affordable, quality housing for all citizens.

“Undoubtedly, the next big area of focus for developers will be on creating new and additional sources of demand, which may soon materialize in the much-anticipated change in foreign ownership laws,” Partner and Head of Research in the Middle East and North Africa region Faisal Durrani said.

“We continue to march toward an eventual and much-anticipated easing in international ownership laws in the Kingdom. The recent change in investor rules allowing international investors to access the property markets in the Holy Cities through listed companies, announced in January, will help to begin addressing the pent-up demand from international investors hungry to access real estate markets in the Kingdom’s Holy Cities,” he added. 

The study further revealed that several factors have contributed to the growth of residential real estate transactions in Saudi Arabia in recent years. In 2023, over 96,000 families benefited from the Kingdom’s Housing Program, which provides access to affordable home financing options. By the first half of 2024, another 55,000 families had gained from this initiative.

The release further revealed that despite record-high prices in cities like Riyadh, 45 percent of affluent Saudis are still eager to buy a home this year.

It also indicated that while the domestic homeownership rate is nearing the government’s 70 percent target for 2030, rising borrowing costs and escalating house prices are dampening demand. 

Knight Frank’s survey, conducted with YouGov and covering 1,037 households in the Kingdom — including 100 Saudi-based expats — highlighted a reduced interest in property purchases among first-time and current homeowners.

“What we are experiencing now is an organic slowing in demand as the 70 percent home ownership target approaches and as residential values start to peak in the current cycle. The rampant house price growth across the country, too, is curbing the appetite to purchase,” Regional Partner in Strategy and Consulting in Saudi Arabia at Knight Frank, Harmen de Jong, said.

“This has been evidenced by our survey results, as among our respondents, just 33 percent plan to buy a home or upgrade their accommodation in 2025, which is down on the 40 percent figure we recorded in 2023, which underscores the success the authorities have had in boosting home ownership levels,” he added. 

The analysis unveiled that first-time buyers’ demand for home purchases has decreased to 29 percent, down from 40 percent in 2023 to 84 percent in 2022. 

The property firm highlighted that the government’s initiatives to increase homeownership among Saudi nationals, which reached 63.7 percent by the end of 2023, are now bringing the target of 70 percent by 2030 within close reach.

In Riyadh, apartment prices have increased by 75 percent over the past five years, while villa prices have risen by 39 percent during the same timeframe. 

The high-interest-rate environment, with current levels at 5 percent compared to 1 percent in 2021, is further contributing to the growing factors reducing demand.