Saudi Round-Up: Creating Opportunities, Driving Innovation
This Saudi Round-Up features the top stories across general business and economy, real estate, and tourism, in addition to a special focus on the many deals spurred on and signed at LEAP 2024.
Highlights From LEAP 2024
LEAP is a yearly, world-class technology conference that attracts thousands of international firms. The Ministry of Communication and Information Technology founded the event in 2022 to facilitate discussions about opportunities within the sector.
More than $12 billion worth of agreements were signed at LEAP 2024, surpassing previous years. Alongside brands like Ericsson, STC Group, and Deloitte, the Saudi Government signed strategic deals, launched new services, and discussed digital transformation, enhancing the Kingdom’s position as a leading digital technology hub.
Several venture capital funds announced their intention to fuel the Saudi economy, including a $500-million fund for growth-stage ventures and a $100-million fund from Oasis Capital for early-stage international ventures.
The most significant deals include Mozn’s agreement with Google Cloud to reduce the global loss of $200 billion to financial crime, as well as initiatives involving the Saudi Data and Artificial Intelligence Authority, Samsung Electronics, PwC Middle East, King Abdulaziz City for Science and Technology, and Hewlett Packard Enterprise.
Aramco Digital announced a potential partnership with Groq to create the world’s largest AI computer center and help grow the industry in Saudi. Meanwhile, Nokia and the US software firm Adobe announced regional headquarters in Riyadh.
Furthermore, Abdullah Al-Swaha, Minister of Communications and Information Technology, introduces the Kingdom’s upcoming national space strategy. The associated space company would allow significant government investment and private sector contribution.
General Business and Economy
Non-Oil Activities Up 4.4 Percent in 2023
According to the General Authority for Statistics (GASTAT), non-oil activities grew by 4.4% in 2023 compared to 2022.
In line with the objectives of Vision 2030, the report also says that most of the Kingdom’s economic activities increased last year. Sectors showing growth include wholesale and retail trade, hotel activities, and restaurants, which grew by 7% in 2023 compared to the year before; insurance, financial, and business services grew by 6.8%.
Aramex Regional HQ to Provide Substantial Economic Benefits
Aramex, the Emirati logistics business, demonstrated its long-term commitment to the Kingdom by setting up regional headquarters. The firm intends to facilitate innovative projects to bolster the Saudi economy.
The decision follows December 2023’s announcement of incentives for foreign companies setting up regional headquarters. The firm emphasized that supporting Saudi’s evolution into a global logistics hub is a strategic priority.
SAR-Maersk Deal to Enhance Saudi Logistics
Saudi Railways Co. and Maersk have signed a three-year contract to increase container transport between Dammam and Riyadh. The deal is intended to foster collaborative solutions that increase operational efficiency and innovation.
The move will raise the status of King Abdulaziz Port and it aligns with the National Transport and Logistics Strategy, in support of Vision 2030, directly contributing to Saudi’s rankings on the Logistics Performance Index.
Kingdom’s National Transformation Program Ahead of Schedule for Vision 2030
In its attempts to fulfill Crown Prince Mohammed Bin Salman’s mandate to improve the Saudi business environment, the National Transformation Program has beaten its initial targets.
The program has empowered the Kingdom’s private sector and increased foreign direct investments, attracting more than $32.5 billion in 2022. According to the Global Entrepreneurship Monitor Report 2022, Saudi Arabia is the second-best global economy for business.
Ministry of Industry Introduces Streamlined License to Facilitate Construction
The Ministry of Industry and Mineral Resources will provide a new, more efficient construction license.
Simplifying the current system will help the body to maximize the mining sector’s value and protect its interests, in alignment with the National Industry Development and Logistics Program and Vision 2030.
Real Estate
Holy Cities Attract Significant Potential Investment
According to a recent Knight Frank survey, 92% of high-net-worth respondents plan to invest a projected $2 billion in Makkah and Madinah properties.
These holy cities are prime attractions that will be positively impacted following the Kingdom’s introduction of new premium residency visa options. The emphasis on high-quality real estate is in accordance with Saudi Vision 2030’s drive toward economic diversification away from the country’s traditional reliance on oil.
Riyad Capital and Al-Ramz Launch $186 Million Property Development Fund
Riyad Capital will develop an office property project in partnership with Saudi real estate firm Al-Ramz. The new initiative, called the Durrat King Khalid Fund, will focus on an area of 27 square kilometers.
This $186 million real estate fund—the third collaborative fund for these two companies—is aimed at creating a business environment to attract global companies to move their regional headquarters to Riyadh, as part of Vision 2030.
Industrial Real Estate Assets to Benefit from $479.9 Million Arcapita Capital Co. Fund
Arcapita Capital Co. closed its $479.9 million investment fund, deploying a significant amount to Saudi real estate assets in manufacturing and warehousing.
The firm plans strategic investments in Riyadh, Jeddah, and the Eastern Province. Deputy CEO Hisham Al-Raee highlighted the importance of the Kingdom’s industry and logistics. He emphasized that the firm would continue to support Saudi’s transformation into a global logistics hub.
Automotive
Ceer to Open its $1.3Bn Complex in KSA
Ceer, Saudi Arabia's pioneering electric vehicle brand and manufacturer, has awarded a SAR 5 billion contract to build its Electric Vehicle Manufacturing Complex in King Abdullah Economic City. This marks a significant milestone in the kingdom's automotive sector, signaling a strategic move towards economic diversification and sustainable development.
The complex, spanning over 1 million square meters, will house advanced facilities for vehicle production, creating new opportunities in the automotive industry. Ceer's commitment to manufacturing sophisticated electric sedans and SUVs aligns with Saudi Arabia's Vision 2030 objectives for carbon emission reduction and technological innovation, positioning the kingdom as a key player in the global electric vehicle market.
Tourism
Major Entities Seal Deals at Saudi Tourism Authority Trade Show
The Saudi Tourism Authority’s participation in a Berlin trade show is projected to attract a further 350,000 tourists. The authority signed 14 deals at the trade show, including agreements with Trip.com, Eurowings, and Flynas.
Thanks to a strong 2023, the Kingdom achieved its Vision 2030 ambition of attracting 100 million tourists per year seven years early. Tourism Minister and STA Chairman Ahmed Al-Khateeb highlighted the sector’s bright future.
Red Sea Global and Four Seasons Announce Triple Bay AMAALA Resort
Red Sea Global’s second collaboration with Triple Bay AMAALA will result in a new Four Seasons luxury wellness resort featuring 220 rooms, suites, and villas.
Four Seasons’ official Bart Carnahan expressed the firm’s content at being part of the Kingdom’s fast-growing tourism industry.
NEOM Reveals Golf Community Development: Gidori
NEOM’s new 18-hole golf community project—Gidori—is set to be located in the hills of the Gulf of Aqaba. It will feature 190 sea-view apartments, 200 unique private villas and homes, and NEOM’s characteristic architecture, which blends in with the landscape.
This project follows NEOM’s announcement of Xaynor this month, Norlana in December, and Epicon in November, all in support of the country’s tourism ambitions.
From LEAP’s facilitation of technological advancement to luxury tourism resorts leveraging innovative solutions for sustainable growth, Saudi Arabia lives up to its growing reputation as a world leader. Join us next week for another round-up of the week’s most salient business news as the public and private sectors work together to advance the Vision 2030 agenda.
