Saudi Round-Up: Major Strides Seen in IPO Activity and Gaming Sector

This week’s round-up underscores the growth of the non-oil economy with highlights in aviation, entertainment, real estate, retail, tourism, technology and hospitality.

From 9 to 15 July 2024

General Business and Economy

Kingdom Rated Second-Best Country for Expats

The latest edition of the Expat Insider Survey suggests that Saudi Arabia is the second-best country in the world for expats. This estimation puts the Kingdom above the US, Belgium and the UK.

The index considers several criteria, including job market, salary, job security, career prospects, and economic conditions. The economic transformation driven by Saudi Vision 2030 has helped the Kingdom move from position 14 on the index in 2023.

Kingdom Leads GCC IPO Market

According to Kuwait Financial Center, Saudi Arabia saw 19 offerings in the first half of this year, raising $2.1 billion. This is 59% of all IPO proceeds in the Gulf Cooperation Council region and a year-on-year increase of 141%.

This IPO growth underscores the Kingdom’s ambitious privatization and diversification activity in multiple high-growth sectors, including healthcare, renewable energy, and technology. The ongoing economic stimulus makes Saudi Arabia attractive to global investors in line with Vision 2030.

Saudi Arabia Leads Venture Capital Activity

According to data platform MAGNiTT, Saudi Arabia secured $412 million in the first six months of 2024. The platform attributed almost a third of this figure to one $130 million deal involving Salla.

The country’s growth echoes the dynamism of its economic environment. MAGNiTT CEO Philip Bahoshy emphasized the robustness of the Kingdom’s economy, which achieved growth this year despite having only one mega deal, whereas last year there were four.

Aviation

17% Growth in Civil Aviation Sector Passengers

According to the General Authority of Civil Aviation, the Kingdom’s civil aviation sector grew 17% to 62 million passengers in the first six months of 2024. The figures also show that there were 446,000 flights, which is a 12% increase compared to 2023.

This growth aligns with the Kingdom’s aviation goals, including tripling passenger numbers to 330 million by 2030.

Entertainment

Kingdom Ranks 2nd in Average Daily Video Game Playtime

A report from the US-based online gaming platform Mobile Premier League demonstrates that Saudi Arabia has the second-highest average daily gameplay time in the world. This shows the massive growth of gaming culture in the Kingdom, with more than 50% of the population playing video games.

Saudi Arabia’s National Gaming and Esports Strategy aims to enhance this lucrative market, which could contribute as much as $13 billion to GDP.

PIF-Owned Diriyah Co. Takes Ownership of Diriyah Sports Club

Transferring ownership of Diriyah Sports Club from the Ministry of Sport to PIF-Owned Diriyah Co. is part of the Sports Clubs Investment and Privatization Project. The move will enhance investment in facilities, talent, and participation throughout the sector.

Chairman of Diriyah Co., Crown Prince Mohammed bin Salman, has approved the creation of Diriyah Sports Club’s board, which will position Diriyah as a leading cultural, entertainment, tourism, and sports destination, in line with Vision 2030 objectives.

Saudi Arabia to Host Olympic Esports Next Year

Saudi Arabia is set to host the inaugural Olympic Esports Games next year. This highlights Saudi Arabia's rapidly growing gaming and sports sectors as key components of the nation's Vision 2030 roadmap.

The International Olympic Committee (IOC) will soon determine the host city, event venues and dates, game titles, player qualifications and other details for the inaugural edition of the Olympic Esports Games.

Technology

SDAIA First in World to Receive ISO Certification for AI Management Systems

The Saudi Authority for Data and Artificial Intelligence (SDAIA) is the first organization in the world to receive the International Standards Organization’s (ISO) Artificial Intelligence Management Systems (AIMS) certification.

AIMS provides a framework for companies addressing the challenges of implementing and managing AI. Being the first to achieve AIMS certification underscores the Kingdom’s rising prominence in data and AI, positioning Saudi Arabia as a world leader in the sector.

Real Estate

Private-Public Partnerships Driving Saudi Real Estate Surge

Speaking at the European edition of the 15th Real Estate Development Summit Saudi Arabia, CEO of Rafal Real Estate, Elias Abou Samra, noted the importance of private-public partnerships in the Kingdom’s real estate sector.

Abou Samra highlighted significant opportunities waiting for investors, including the $1.5 trillion pipeline recently reported by JLL, the US-based global real estate services firm.

Retail

Analysis Points to 28% Growth in Riyadh Retail Space

A report from Knight Frank, the global real estate consultancy firm, shows that shopping malls and the expansion of lifestyle spaces should grow Riyadh’s retail area to 4.6 million square meters by 2026, an increase of 28%. Riyadh’s current retail supply is 3.6 million square meters.

Bolstering the retail sector is critical to the Kingdom’s ambition to be a global tourism hub. Alongside growth in entertainment, including concert halls, theme parks, sports facilities, and cinemas, the retail landscape is set to contribute substantially to non-oil GDP growth.

Tourism and Hospitality

Diriyah Awards Construction Contract Worth $2 Billion

Diriyah has agreed to a $2 billion deal with China State Construction Engineering Corp. and El Seif Engineering Contracting Co. The completed project will offer spaces for retail, entertainment, hospitality, and residents. Work is set to begin in the third quarter of 2024.

Developing the heritage city into a vibrant visitor destination is a key part of the Kingdom’s goal of economic diversification. The size and scale of this project underscores Diriyah’s commitment to positioning the country as a global tourism hub.

Hotels Drive POS Spending of $3.5 Billion

According to the Saudi Central Bank, the Kingdom’s point-of-sale spending reached $3.51 billion in the week to July 6, marking a 7.7% rise.

The most significant increase was in hotel payments, which saw a 17.9% increase to $69.2 million.

The news across the Kingdom’s sectors points to an ongoing coordinated effort and widespread growth. Bookmark us to come back next week for another look at the changing cultural and economic landscape making Saudi Arabia one of the most exciting places in the world to live, work, and do business.