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Ready to explore ‘Saudi Arabia this week’ by Analytix, with the latest weekly news updates and business insights from Saudi Arabia. Here we go!
From 21st June to 27th July 2024
Riyadh sees a notable growth in office market in the first half of 2024
RIYADH: Savills’ latest reports revealed that Riyadh’s office market has shown a great deal of growth in the first half of 2024. This growth indicates development of Saudi Arabia’s non-oil sector.
The Office market in the first quarter of 2024 increased by 3.4% from that of the previous year, against expectations. It is predicted that the overall economy will grow by 5% this year, backed by the ongoing non-oil activity.
Currently, the inflation rate is low at 1.6% year-on-year and the constant Purchasing Managers’ Index (PMI) at 56.4, which suggests expansion, are considered positive signs for the business environment. FDI rose up by 5.6% year-on-year in the first quarter, driven by Saudi Vision 2030’s aim to attract foreign capital and provide investment incentives.
Riyadh has been experiencing an inflow of foreign companies relocating their headquarters. Over 120 foreign firms relocated to Riyadh in the first quarter of 2024, a 477% increase from the previous year. Major international firms such as PayerMax and Ernst & Young have set up their headquarters in the city.
There’s been a high demand for leasing, especially in sectors like Technology, Media & Telecommunications, Consulting & Engineering and Manufacturing. The new-entrant firms accounted for 50% of the leasing deals, representing strong market optimism. There’s a higher demand for office spaces that are not more than 1,000 square meters.
Rental rates also increased with Grade A office space getting almost fully occupied with a 98% occupancy rate. Rents hiked by 3% from the previous quarter and 13% year-on-year with some regions witnessing more inclines. Further, by the end of 2025, another 650000 square meters of office space is expected, which is again likely to enhance the tenant choices and prevent the supply crunch on rent.
AlUla, first Middle East destination to gain US accreditation
RIYADH: One of the top tourist spots in Saudi Arabia, AlUla, has set a record by being the first place in the Middle East to be accredited by Destinations International – a US-based organization. This achievement, covered by the Saudi Gazette shows AlUla’s efforts in matters of quality and professionalism in tourism.
The accreditation is in the Destination Marketing Accreditation Program (DMAP) and comes one year after AlUla signed up as the first region member of Destinations International. This certification aims at identifying destination marketing organizations that have complied with various criteria in different aspects which include governance, stakeholder engagement, financial management, and destination development.
AlUla had to meet more than one hundred Performance Benchmarks, to be awarded this status. This achievement adds to the numerous recognitions acquired by AlUla within the recent years, including AlUla being the Middle East’s leading cultural tourism project for the second year running at the World Travel Awards Middle East. AlUla is also recognized as the leading festival and event destination in the region.
Moreover, the Royal Commission for AlUla has been awarded 5 stars by the European Foundation for Quality Management and the Excellence Award from the Middle East Facility Management Association.
AlUla continues to create itself as a luxurious heritage tourism experience to its visitors enriched in arts, culture, nature wellness as well as adventure.
Electric car market rises as Saudi Arabia aims to become a tech hub
RIYADH: The market of electric cars in Saudi Arabia is advancing at a fast rate, as the Kingdom of Saudi Arabia plans to become a center for electric cars. There are still people driving cars that rely on fuel but there is now a growing stream of owners of electric cars.
The ones who own the electric cars say that they use the car for monetary benefits like they spend less on fuel and repair as compared to the common off-road car. However, they note that driving in regions other than Riyadh is challenging because of the underdeveloped infrastructure.
Saudi is investing heavily in the electric car sector. Saudi Arabia’s Public Investment Fund owns a 60% stake in Lucid, an electric vehicle manufacturer. Also, Hyundai plans building a plant in the Kingdom and the domestic brand CEER, established in 2022, has scheduled production by 2025 with a target of 300,000 electric cars annually.
BYD, a Chinese company is likely to dominate the Saudi market as Tesla does not have any dealerships in the Kingdom. Last year, electric car sales tripled to nearly 800 and is set to increase. According to the salesman Hassan Mohammed, the competition which is realized by presence of many car brands that offers after sales services has forced consumers to shift to electric cars.
Saudi Arabia is actively expanding its electric car market, due to demand by consumers and numerous investments.
Saudi Arabia talks global economy at G20 Development Forum
RIYADH: Saudi Arabia’s Economy and Planning Minister, Faisal bin Fadel Alibrahim, has been in talks about the global economy at the G20 Development Ministerial Meeting in Brazil. This meeting started on Monday and ended on the 24th of July.
During the G20 meeting, Alibrahim got the opportunity to have a meeting with the Brazil’s Foreign Affairs Minister Mauro Vieira and they discussed the Brazil’s plan as the current G20 presidency and considered the possibilities of enhancing cooperation in sectors such as infrastructure, agribusiness, and renewable energy.
Alibrahim also spoke with Mathias Cormann, the OECD Secretary-General of the Organisation for Economic Co-operation and Development. They discussed about regional and global economic developments and Saudi Arabia’s collaboration with the OECD.
Moreover, he met with Singapore’s Minister in the Prime Minister’s Office and Second Minister for Ministry of Foreign Affairs and Ministry of Education, Mohamad Maliki Osman. They explored improving cooperation in industrial, educational, investment, and financial sectors.
These meetings underline Saudi Arabia’s commitment to cooperation and development in the global economy.
