UK-based Cheval Collection plans to launch up to seven projects in Saudi Arabia over the next three years as the market opens up to foreign buyers.
“There is a lot of potential in Saudi [Arabia] because real estate laws are changing for the better,” the hospitality focused company's managing director, Mohammed Alawadhi, told The National at the Cityscape Global conference in Riyadh. “We are optimistic that we will be launching one [branded residence] project in the next year.”
The kingdom updated its rules this year. From January, it will allow foreigners to buy property in specific zones in Riyadh and Jeddah, with “special requirements” for home ownership in Makkah and Madinah.
It is also permitting foreign citizens to invest in publicly listed local companies that own property in Makkah and Madinah, as the kingdom seeks to attract more international investment.
Cheval this week launched its second project in Riyadh in partnership with Saudi-based Ladun Investment Company.
Cheval Maison – Sulaymaniyah, a hotel apartments project close to King Salman Park, will have 150 units including studio, one-bed and two-bed apartments for long and short term stays, Mr Alawadhi said. There will be other amenities including a gym and pool as well as food and beverage outlets at the new property.
It is expected to open in 2028, with the construction set to begin next year.
The company’s first project in Riyadh is currently under construction, due to open in 2027.
The company is also aiming to launch six to seven more hotel apartment projects in Saudi Arabia in the next three years as demand remains strong from tourists and corporate executives, he said.
“Saudi Arabia is opening up all the hidden gems for the world to come and see. So tourism has really been growing, besides the religious tourism in Makkah and Madinah that has been increasing every year by millions,” Mr Alawadhi said.
“But then we look at Jeddah, we look at Riyadh, we look at Dammam, I'm talking the big, huge cities. Economically, they are improving.”
Saudi Arabia has outlined ambitious plans to develop its tourism sector by boosting air connections, investing in airports and starting a new airline, Riyadh Air, to drive more international visitors to the kingdom.
The country received 116 million domestic and inbound tourists in 2024, a 6 per cent increase compared to 2023, the Ministry of Tourism said.
Total tourism spending for domestic and inbound travel reached about 284 billion Saudi riyals ($75.7 billion), an 11 per cent year-on-year increase.
“There is a huge demand in the market and less supply,” Mr Alawadhi said.
“A lot of corporates, they prefer to stay in an apartment, because they come here for projects. They come here for two weeks, three weeks. A lot of them want to have their own place here and serviced apartments suit them very well.”
Saudi Arabia is pushing ahead with plans to reform its economy and cut its reliance on the sale of hydrocarbons to generate revenue.
Developing non-oil sectors of the economy such as tourism, technology and mining, as well as further boosting foreign direct investment, are central planks of the kingdom's Vision 2030 agenda.
Outside of Saudi Arabia, Cheval Collection, which owns nine properties in London, also aims to expand in other Gulf countries including Oman, Kuwait, Qatar and Bahrain.
Its Middle East portfolio currently comprises Cheval Maison – The Palm Dubai, which opened in 2023, and Cheval Maison – Expo City Dubai, which opened in March this year.
“We only have two in Dubai. But then we are looking at launching more in Dubai. We are looking at launching in Abu Dhabi. We need to be visible everywhere,” Mr Alawadhi said.
Abdul Jabar Qahraman was meeting supporters in his campaign office in the southern Afghan province of Helmand when a bomb hidden under a sofa exploded on Wednesday.
The blast in the provincial capital Lashkar Gah killed the Afghan election candidate and at least another three people, Interior Minister Wais Ahmad Barmak told reporters. Another three were wounded, while three suspects were detained, he said.
The Taliban – which controls much of Helmand and has vowed to disrupt the October 20 parliamentary elections – claimed responsibility for the attack.
Mr Qahraman was at least the 10th candidate killed so far during the campaign season, and the second from Lashkar Gah this month. Another candidate, Saleh Mohammad Asikzai, was among eight people killed in a suicide attack last week. Most of the slain candidates were murdered in targeted assassinations, including Avtar Singh Khalsa, the first Afghan Sikh to run for the lower house of the parliament.
The same week the Taliban warned candidates to withdraw from the elections. On Wednesday the group issued fresh warnings, calling on educational workers to stop schools from being used as polling centres.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
