Saudi Arabia’s premium residency visa opens market to expats and investors

Saudi Arabia’s premium residency visa option will also compel developers to expand their portfolios by including more premium residential projects, thus transforming the urban landscape of major cities in the Kingdom including Riyadh, Jeddah and Dammam. (Shutterstock)
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Updated 06 April 2024
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Saudi Arabia’s premium residency visa opens market to expats and investors

  • Initiative is a pivotal shift in KSA’s approach to property ownership by non-Saudis: Knight Frank

RIYADH: New additions to the premium residency visa options by the Saudi government this year could open the Kingdom’s market to affluent expatriates and investors, a survey said. 

According to the report released by real estate consultancy Knight Frank, this initiative is a pivotal shift in the Kingdom’s approach to residency and property ownership by non-Saudis and is expected to have substantial implications for the demand dynamics of residential properties.

The premium visa residency option, launched in 2019, aims to allow eligible foreigners to live in the Kingdom and receive benefits such as exemption from paying expat and dependents fees, visa-free international travel, and the right to own real estate and run a business without requiring a sponsor.

To attract more foreign talents and to diversify the economy, the Kingdom added five new products to its premium residency program in January 2024. 

Under the new addition, the most noted one was the privilege to own residential real estate assets worth a minimum of SR4 million ($1.07 million) within the Kingdom. 

“The threshold of SR4 million is set to ensure that the investments are significant, likely leading to an influx of high-value transactions in the real estate market. This could potentially increase the demand for luxury and high-end residential properties, driving up property values in these segments,” said Knight Frank in the report. 

According to the UK-based consultancy, Saudi Arabia’s premium residency visa option will also compel developers to expand their portfolios by including more premium residential projects, thus transforming the urban landscape of major cities in the Kingdom including Riyadh, Jeddah and Dammam. 

“The introduction of this new visa scheme, however, signifies a strategic opening of the market to international investors and affluent expatriates seeking long-term residency options,” said Talal Raqqaban, partner, valuation, PPP and deal advisory at Knight Frank.

Demand for branded residences drives growth

According to the consulting firm, the demand for branded residencies in Saudi Arabia is driving the growth of the real estate sector in the Kingdom. 

The report revealed that Saudi Arabia is witnessing significant investments in these residential offerings, and added that the Kingdom is one of the most exciting new markets globally. 

The introduction of this new visa scheme signifies a strategic opening of the market to international investors and affluent expatriates seeking long-term residency options.

Talal Raqqaban Partner, valuation, PPP and deal advisory at Knight Frankç

Knight Frank said that the growing number of high-net-worth individuals in Saudi Arabia is likely to help bolster demand for branded residences. 

The number of HNWI in the Kingdom rose from 122,784 to 134,539 between 2022 and 2023, the report added. 

“The unique and exclusive nature of branded residences only adds to their allure. Moreover, the assurance of quality service and maintenance by the associated brands makes these investments particularly attractive and all but assures asset value appreciation,” said Mohamad Itani, partner, residential sales and marketing projects at Knight Frank. 

The report added that international appetite for branded residences in the Kingdom has recently received a shot in the arm with the introduction of the new property ownership-linked premium residency visas. 

“With a minimum threshold of SR4 million to qualify, demand for homes in the Kingdom is expected to rise as a result, noting that the property needs to be owned outright, with no debt against it, to receive the premium residency,” Knight Frank said in the report.

NEOM emerges as Saudi expats’ most preferred giga-project

The real estate consultancy revealed that Saudi Arabia’s $500-billion mega project NEOM is the most preferred residential destination among expats, with 29 percent of the surveyed participants wishing to buy a home in this sustainable city. 

This was closely followed by Jeddah Central at 15 percent and King Salman Park at 8 percent, the report added. 

The assurance of quality service and maintenance by the associated brands makes investments particularly attractive and all but assures asset value appreciation.

Mohamad Itani Partner, residential sales and marketing projects at Knight Frank

Of those interested in NEOM, 42 percent are interested in The Line, while 19 percent of the participants want to have a home on Sindalah Island.

“Saudi Arabia’s giga-projects represent some of the most ambitious construction ever undertaken and it stands to reason that these new city-sized developments continue to captivate prospective buyers,” said Faisal Durrani, partner, head of research for Knight Frank in the Middle East and North Africa region. 

He added: “NEOM has consistently ranked as the most preferred location for Saudi’s eyeing up future home purchases in the Kingdom’s Giga projects and it appears that expats too have been wooed by the planned ultra-futuristic offerings at the Belgium-sized $500 billion super-city.” 

Some 82 percent of the 241 expatriates who took part in the survey said that they are ready to spend under SR3.75 million to own a home in NEOM. 

“(Some) 32 percent say they will look to spend under SR750,000, which may cause challenges for developers as Knight Frank expects that the bulk of stock in the giga-projects will be priced north of $ 1 million,” the report added. 

FASTFACTS

• The premium visa residency option, launched in 2019, aims to allow eligible foreigners to live in the Kingdom and receive benefits such as exemption from paying expat and dependents fees.

• According to the consulting firm, the demand for branded residencies in Saudi Arabia is driving the growth of the real estate sector in the Kingdom.

On a positive note, 41 percent of the participants revealed that they were still interested in making a purchase in the giga-project and were also willing to reconsider their budget. 

Overall, the average expat budget for a home in a giga-project stands at SR2.7 million, nearly 58.8 percent higher than for elsewhere in the Kingdom. 

According to the report, millennial expats aged below 35 claim to have the deepest pockets, with average budgets of SR4.3 million, nearly twice compared to people aged between 45 to 55 whose budgets stand at SR1.5 million. 

“High-earning expats are eager to own property in the Kingdom’s giga-projects and the fact that high earners are prepared to spend more on giga-project homes will be welcome news for developers, but the key will be to offer distinctive community features and amenities that go above and beyond. Open spaces and having a park view, for instance, top expats’ wish lists,” said Itani.


Saudi GACA, Germany’s Lilium sign MoU to boost air mobility roadmap   

Updated 22 July 2024
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Saudi GACA, Germany’s Lilium sign MoU to boost air mobility roadmap   

RIYADH: Saudi Arabia’s General Authority of Civil Aviation has inked a deal with German electric vertical take-off and landing vehicle manufacturer Lilium, propelling the Kingdom’s advanced air mobility roadmap.

The memorandum of understanding, signed between the authority and the aerospace firm at the Farnborough International Airshow, supports GACA’s development of AAM solutions in the Kingdom, according to a statement. 

This comes as the authority collaborates with stakeholders and companies globally to create a thorough national plan for AAM. 

This strategy encompasses the essential elements and regulatory framework needed to ensure AAM technologies’ secure and effective integration. During the implementation phase, the focus will be on incorporating eVTOL operations with existing aviation systems and other transportation modes.

The newly signed MoU falls in line with the authority’s engagement with global companies to bring new aviation mobility solutions to Saudi Arabia.

It also aligns well with GACA’s continuous efforts across the industry to ensure the Kingdom has regulations that encourage growth, ensure the highest levels of safety, and put passengers first.

“This agreement reflects GACA’s commitment to advancing innovative and sustainable air mobility solutions for Saudi Arabia in support of Vision 2030,” GACA President Abdulaziz Al-Duailej said. 

“By working with global advanced air mobility companies, we aim to establish a robust regulatory framework that ensures the safe and efficient operation of eVTOL aircraft,” Al-Duailej added. 

From Lilium’s side, CEO Klaus Roewe said: “Our goal is to jointly advance regulatory and practical steps for suitable framework conditions for electric aviation and our customers in Saudi Arabia.”

He added: “Today’s agreement delivers on one of the main ingredients required to successfully launch eVTOL operations — a definitive path to all relevant regulatory cornerstones.”

The announcement builds on the momentum of recent successful air taxi trials in support of GACA’s AAM roadmap development, the statement added. 

Last week, Lilium confirmed that it is making its debut in Saudi Arabia with a groundbreaking agreement to supply up to 100 eVTOL vehicles to Saudia, the Kingdom’s first national carrier.

The formalization of this agreement came after a framework deal was initially arranged in late 2022, making Saudia the first airline in the region to invest in sustainable air mobility. 


Saudi logistics platform OTO secures $8m funding for UAE and Turkiye expansion

Updated 22 July 2024
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Saudi logistics platform OTO secures $8m funding for UAE and Turkiye expansion

RIYADH: Saudi logistics platform OTO is set to expand into the UAE and Turkiye, following a successful SR30 million ($8 million) series A funding round. 

The company announced that the financing was led by Sanabil Investments, a wholly-owned entity of the Public Investment Fund, with additional contributions from Sadu Capital, and Iliad Partners. Propeller and Soma Capital also participated in the deal, according to a press release. 

This follows a previous raise of SR12.3 million from venture capital funds and angel investors including Middle East Venture Partners, Derayah Ventures, and 500 Global.  

This investment supports Saudi Arabia's National Logistics Strategy, which seeks to rank the Kingdom among the top 10 countries globally in performance in the sector by the end of the decade, in line with Vision 2030 objectives. 

Mohammad Al-Razaz, co-founder and CEO of OTO, said: “Securing this funding round is a testament to our team’s dedication and our commitment to transforming the shipping and logistics sector in line with Saudi Vision 2030.”   

The company claims its platform integrates with over 250 local and international shipping companies and e-commerce platforms, enabling merchants to manage, ship, track, and analyze their logistics activities.   

The platform also offers merchants the option to connect their own shipping contracts or purchase shipping labels at pre-negotiated rates. 

He added: “We are focused on delivering innovative solutions that enable merchants to streamline their operations and manage logistics with unmatched efficiency.”

Investor confidence in OTO’s platform is bolstered by projections showing Saudi Arabia’s e-commerce revenue is expected to grow at 13.5 percent annually through 2027, outpacing the global average growth rate of 11.2 percent, according to Agility Logistics. 

The platform plans to use this funding to expand its presence in Saudi Arabia, the UAE, and Turkiye by adding new features and enhancing its platform, focusing on small and medium-sized businesses and e-commerce merchants. 

The release stated that the Turkish e-commerce market is projected to grow at an annual rate of 11.58 percent from 2024 to 2029, reaching $49.5 billion by 2029.   

“The last few years have put a significant spotlight on the shipping industry and increased the need for smart shipping solutions. OTO has built a platform with a fully integrated set of functionalities to help companies of all shapes and sizes meet their logistics requirements,” a spokesperson from Sanabil Investments stated.  

OTO serves over 10,000 local and international brands and has seen its revenue double along with a notable increase in orders processed year-over-year. 

Furkan Uzar, chief technology officer and co-founder of OTO, said that this funding propels the company toward its vision of becoming the shipping gateway of the internet.   

“By bridging the tech gap between sales channels and shipping providers, we can accelerate our growth and offer customers streamlined, automated shipping solutions,” he added. 


Closing Bell: Saudi main index slips to close at 12,174

Updated 22 July 2024
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Closing Bell: Saudi main index slips to close at 12,174

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Monday, losing 28.17 points, or 0.23 percent, to close at 12,174.76. 

The total trading turnover of the benchmark index was SR8.34 billion ($2.22 billion) as 127 of the stocks advanced, while 96 retreated.  

The Kingdom’s parallel market Nomu rose 277.53 points, or 1.08 percent, to close at 26,040.47. This comes as 35 of the listed stocks advanced, while 30 fell. 

The MSCI Tadawul Index lost 6.03 points, or 0.39 percent, to close at 1,523.43.

The best-performing stock of the day was Dr. Soliman Abdel Kader Fakeeh Hospital Co. The company’s share price surged 7.02 percent to SR64.

Other top performers were Sadr Logistics Co. as well as United Cooperative Assurance Co.

The worst performer was Al Sagr Cooperative Insurance Co., whose share price dropped by 4.78 percent to SR21.90. 

Other stocks to fall were Miahona Co. and ACWA Power Co.

On the announcements front, Aldrees Petroleum and Transport Services Co. has announced its interim financial results for the period ending on June 30. 

According to a Tadawul statement, the firm’s net profit stood at SR159.8 million at the end of the first six months of 2024, up 13.4 percent from the corresponding period in 2023. 

The increase in net profit is due to the rise in petrol and transport division sales, deposit income, and sukuk, as well as the revenue from the joint venture project investment. 

There was a decrease in the other income and increase marketing, selling, and general costs as well as administrative, financing, and zakat expenses.

Saudi Exchange also announced the listing and trading units of SEDCO Capital Multi Asset Traded Fund as a closed ended investment traded fund on the main market on July 24 with the symbol 4703 and ISIN Code SA162G529FL8, and with +/- 30 percent daily price fluctuation limits and +/- 10 percent static price fluctuation limits.

A bourse filing revealed that these fluctuation limits will be applied during the first three days of listing, and from the fourth trading day onwards, the daily price fluctuation limits will revert to +/- 10 percent and the static price fluctuation limits will no longer apply.


Saudi Arabia awards 4 salt exploration licenses in Eastern Province

Updated 22 July 2024
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Saudi Arabia awards 4 salt exploration licenses in Eastern Province

RIYADH: Saudi Arabia has granted exploration licenses for salt deposits in Eastern Province’s Sabkha Ras Al-Qaryah to four companies following a competitive tendering process.     

The winning firms are Khalid Al-Zahid and Sons Co., Ibrahim Al-Issa and Partner Salt Co., Riyadh Salt Industry Co., and Rastan Limited, as announced by Jarrah bin Muhammad Al-Jarrah, spokesperson for the Ministry of Industry and Mineral Resources.    

Al-Jarrah noted that the ministry received six applications for the exploration licenses, announced in March through a mining platform. Five applications passed the qualification stage, while one did not meet the requirements.  

This aligns with the government’s goal of maximizing the Kingdom’s mineral resources, valued at SR9.3 trillion ($2.4 trillion), in line with Saudi Vision 2030. The initiative aims to enhance licensing transparency, promote national industries, and contribute to local content development and job creation.    

In its earlier release, the ministry revealed that the total area of the four sites offered for competition is 5 sq. km. The Ras Al-Qaryah complex, a coastal sabkha located approximately 4 km from the sea, has naturally exposed salt deposits in some locations on its surface.   

It added that the salt ore in the area is deposited in a stratified form and is suitable for various industrial applications. It supports the manufacturing and petrochemical industries, as well as the production of high-purity table salt and food-grade salt. This ore is refined into high-quality industrial salt with a purity of approximately 99 percent sodium chloride. 

Earlier this week, Saudi Arabia unveiled its largest mineralized belts to date, covering 4,788 sq. km and granting five new exploration licenses. 

Three of these licenses are allocated to the Jabal Sayid site in Madinah, spanning 2,892 sq. km and containing minerals such as gold, silver, copper, zinc, and lead. 

The remaining two licenses are for the Al-Hajjar site in the Asir region, which covers 1,896 sq. km and also includes gold, silver, copper, zinc, and lead, according to a statement from the ministry.

According to a MineHutte and Mining Journal report, Saudi Arabia has experienced the fastest global growth in mining sector investments. Over the past five years, the Kingdom has enhanced its regulatory and infrastructural environment, achieving the second-best global ranking for mining licensing. 


Saudi giga-project NEOM and Equinox Hotels unveil luxury resort in Magna

Updated 22 July 2024
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Saudi giga-project NEOM and Equinox Hotels unveil luxury resort in Magna

RIYADH: Saudi giga-project NEOM and hospitality firm Equinox Hotels have announced plans to open a resort on the coast of the Gulf of Aqaba as part of the recently unveiled Magna development.

In June, NEOM introduced the luxury destination, which will feature 12 locations along 120 km of coastline. It is part of the project’s sustainable portfolio, and will feature 15 hotels, 1,600 rooms, and over 2,500 residences. 

Magna will create 15,000 jobs, add SR2.6 billion ($693 million) to the Kingdom’s gross domestic product by 2030, house 14,500 residents, and attract 300,000 visitors annually, offering a unique investment opportunity with a focus on sustainability.

Equinox Resort Treyam will occupy one of the 12 locations, and the company’s CEO Christopher Norton said: “As a region, NEOM embodies the future of luxury hospitality, and Equinox Hotels is thrilled to create an unparalleled resort experience within this visionary destination.”

Norton added: “Our partnership with NEOM highlights a shared commitment to innovation, sustainability, and redefining the boundaries of hospitality. Located between THE LINE and the southernmost point of the Gulf of Aqaba, our resort will serve as the model for transformative luxury, activating the entire destination with experiences that only Equinox Hotels can offer.”

The resort will feature a 450-meter-long bridge-like structure suspended 40 meters above a lagoon.

An artistic impression of the resort. Supplied

Jeremy Lester, Magna executive director, said the collaboration with Equinox Hotels will “shape the future of luxury hospitality,” adding: “Equinox Resort Treyam embodies the convergence of innovation and luxury, and this partnership will redefine sustainable hospitality with a focus on truly immersive experiences and active lifestyles.”

Chris Newman, executive director of NEOM Hotel Division, described the plan as “a significant milestone in our journey to redefine luxury hospitality” within Magna.

He added: “This resort will be an example of transformative luxury, offering distinctive and inspiring experiences that only Equinox Hotels can deliver. Guests will have the opportunity to fully engage with this extraordinary location, where every detail is designed to enhance their well-being, elevate their journey, and support a high-performance lifestyle.”