Despite escalating global economic fluctuations and geopolitical tensions, the Saudi real estate market continues to attract international investments, supported by clear economic policies, expanding development opportunities, and demand for housing. In the latest indications of this trend, Arada Real Estate Development Company is entering the Saudi market through a partnership with the local Extopia, within a portfolio of lands and projects worth 50 billion riyals ($13.3 billion), launching with a residential project in the Al-Rimal neighborhood in Riyadh worth 14 billion riyals, in a step that reflects the company’s confidence in the growth prospects in the Kingdom despite the uncertainty witnessed in global markets.
The Chairman of the Board of Directors of Arada, Muhammad Al-Dabaan, believes that this trend is based on long-term confidence in the prospects of the Saudi economy. In an interview with Asharq Al-Awsat, he stressed that investment in the Kingdom is not linked to passing market conditions, but rather to the developmental transformations led by “Vision 2030.”
He pointed out that the clarity of economic policies and the continuity of reforms and infrastructure development provide investors with the elements to make long-term investment decisions with confidence.
He said that raising the rate of home ownership and improving the quality of life are among the primary goals of the “Saudi Vision,” indicating that his company seeks to contribute to achieving these goals by increasing housing options and developing integrated communities that respond to the needs of families.
He went on to say: “No single project can determine market prices; They are affected by supply and demand, land and construction costs, and financing. However, expanding supply, diversifying products, and improving development efficiency are factors that contribute to enhancing competition and providing broader choices for buyers.”
The beginning... Al-Rimal neighborhood
It represents the first project in the Al-Rimal neighborhood (northeast of Riyadh), with a value of 14 billion riyals and includes about 3,500 villas and townhouses. The company does not view the residence as an independent unit only, but as part of a community in which services, facilities, and green spaces are integrated. The goal is to provide real and sustainable value to the population, in line with the Kingdom’s ambitions in the real estate sector, according to Al-Dabaan.
He revealed the secret of choosing to invest in the Kingdom, saying: “It is not dependent on a passing market circumstance, but rather is based on firm confidence in the future of the country, and in the economic and development transformation led by (Vision 2030) with the support of the government,” stressing that the country, through the clarity of its vision, the continuity of its reforms, and the development of its infrastructure and investment environment, has established foundations that give investors the ability to make long-term decisions with confidence.
At a time when the world is witnessing rapid economic and geopolitical changes, the entry of an international developer like Arada into the Saudi market reflects a practical conviction in the solidity of the opportunities offered by the Kingdom and its growth prospects.
He explained that this project is an investment in the future and not just a response to an existing demand today, and that the partnership aims to contribute to the development process through integrated housing projects that suit the needs of the local market and the aspirations of its residents. He explained that the first project in the Rimal neighborhood is the beginning of a long-term commitment to the Kingdom.
Increasing the ownership rate
Al-Dabaan continued that the company looks optimistically at long-term opportunities in the Saudi market, supported by population growth, the formation of new families, and urban expansion, in addition to the initiatives launched by the Kingdom within “Vision 2030” to raise the ownership rate and improve the quality of life.
Al-Dabaan believes that the next stage will not be measured by the number of new units alone, but rather by the ability of developers to provide communities that suit the residents’ lifestyle and meet their daily needs. He stated that location, availability of financing, purchasing power, quality of infrastructure, and trust in the developer will all be factors that will affect demand. While prices will also remain linked to land, construction, financing and supply levels.
He stated that excellence will be for the developer that combines quality design and implementation, integration of facilities and services, and commitment to what it promises to buyers. This is what Arada aspires to, which is summed up in integrated residential communities based on international development expertise, taking into account the specificity of the Saudi market, and adding lasting value to families and cities.
Partnership with the local “Extopia”.
In the details of the new step, the “Arada” Real Estate Development Company decided to expand its investments in the Kingdom, by launching the “Saudi Arada” Company in partnership with the local “Extopia”, in a step aimed at developing integrated residential projects and communities in a number of major cities in the Kingdom, within a portfolio of lands and projects with a total value of 50 billion riyals ($13.3 billion).
Under the partnership, Saudi Arada will have access to a land portfolio extending over an area of 10 million square metres, distributed across sites in Riyadh, Jeddah and Makkah Al-Mukarramah, allowing the development of multiple real estate projects in the coming years.
Al-Dabaan, who is Chairman of the Board of Directors of Extopia, assumed the presidency of the Board of Directors of the new entity, within the framework of the partnership that combines Arada’s expertise in developing residential communities with the local knowledge of its Saudi partner.
Speaking to Asharq Al-Awsat, Al-Dabaan said that the launch of the company represents the beginning of a long-term presence in the Kingdom, based on strategic locations that allow the development of integrated communities on a large scale, indicating that the Saudi housing market has opportunities for growth in the coming years.
He added that the partnership combines international experience in real estate development and knowledge of the nature of the local market, which supports the company’s plans for expansion and participation in achieving the goals of “Vision 2030” related to housing and quality of life.
Villa and townhouse
The new project in the Rimal neighborhood includes about 3,500 villas and townhouses, in addition to educational, commercial, and sports facilities and a community center, as well as green spaces that include planting about 100,000 trees, as part of the company’s direction towards developing communities that combine residential units and daily services.
The company is scheduled to work in coordination with the relevant government agencies to prepare the general plan for the project, in accordance with regulatory requirements and urban development goals in the capital.
According to the company, the project will be financed through an investment structure regulated by the Saudi Capital Market Authority, managed by a licensed financial company, and construction and sales will begin during 2027.
International expansion
Entering the Saudi market comes within the international expansion strategy of Arada, whose portfolio of projects under development amounts to about 189 billion riyals ($50.4 billion), distributed across five markets including Saudi Arabia, the Emirates, the United Kingdom, Australia and Syria.
The company's portfolio includes more than 70,000 residential units, while the number of units it has completed so far has reached about 17,000 units, according to its data.
The company's entry into the Kingdom represents an extension of the trend of international real estate developers towards taking advantage of the opportunities provided by the Saudi residential sector, in light of population growth, urban expansion, and government programs aimed at increasing the housing supply and diversifying the options available to buyers.
Quality of life
The new project in Riyadh is linked to the goals of improving the quality of life and enhancing green spaces in Saudi cities, within the “Vision 2030” programs.
The Royal Commission for the City of Riyadh, through the “Green Riyadh” programme, is working to plant 7.5 million trees throughout the capital, and to raise the per capita share of green spaces from 1.7 square meters to 28 square meters by 2030.
Through its upcoming projects, Arada Saudi Arabia seeks to develop residential communities that integrate facilities, services and open spaces, in a market that is witnessing increasing competition between local and international developers to meet the demand for housing of various categories.
French government bond yields fell slightly on Tuesday, after recording their largest daily rise in about a month, at a time when investors remained cautious ahead of the vote on the budget bill later in the day.
French bonds tumbled on Monday, after widespread protests across France highlighted the government's difficulties in reducing the large deficit, but imposing a curfew in specific areas helped maintain calm overnight, according to Reuters.
European interest rates strategist at Citi, Jamie Searle, said: “Although today’s vote on the revenue side of the French budget bill is not decisive for the entire process, it gains a little more importance as a near-term indicator.”
Meanwhile, benchmark German bond yields in the euro zone fell slightly, but remained within their recent trading range after falling last week, as continuing pressures on energy prices kept investors holding on to their expectations for further interest rate hikes by the European Central Bank.
Oil prices rose on Tuesday, with Brent crude approaching a five-month high.
Analysts said that it will be difficult to reduce the markets' tendency to expect a further increase in interest rates in a tangible way, in light of the continued absence of indicators of a reliable decline in energy prices, in addition to the possibility that winter weather conditions will play a decisive role in determining the course of gas prices.
The German 10-year government bond yield, the benchmark yield in the euro zone, fell by one basis point to 3.44 percent. The return has ranged between about 3.40 and 3.50 percent since the beginning of this month, with the exception of the decline recorded last Thursday, when technology stocks came under severe pressure.
French government bond yields (OAT) fell by two basis points to 4.90 percent. The spread between French and German bond yields fell by one basis point to 146 basis points. The spread reached 158.67 basis points in early October, its highest level since November 2011.
French far-right leader Marine Le Pen and her radical left rival Jean-Luc Mélenchon expanded their lead over other candidates, according to a poll published on Monday, a scenario that analysts see as the least favorable for efforts to reduce the French fiscal deficit.
The yield on two-year German government bonds, most affected by interest rate expectations, fell by 1.5 basis points to 3.08 percent.
