RIYADH: Young people in the Saudi capital are ready to reshape the city’s landscape and show Riyadh as a hub of dynamic social progress.
From grassroots community organizing to pioneering entrepreneurship and cultural innovation, the new generation of changemakers models itself as the driving force behind positive transformation in their community.
Arab News approached some of those inspiring change.
Talal Al-Hammad, the editor-in-chief of entArabi, said these changemakers are at the forefront of a significant shift toward sustainable and inclusive development.
“It may come as a surprise, but the young entrepreneurs in Riyadh, both men and women, are deeply engaged with all the latest trends in entrepreneurship.
“We have genuine problem solvers, addressing issues unique to Saudi society with innovative solutions.
“They’re making waves across various sectors including fintech, edtech, proptech, blockchain and AI (artificial intelligence), among others.”
He highlighted two ventures as examples of the positive impact these young entrepreneurs are making, the Barakah and Hemam apps.
Co-founded by Abdulaziz Al-Saud and Rabah Habiss, the Barakah app tackles the problem of food waste by using a mobile platform to offer discounts on surplus food from restaurants and stores.
Meanwhile, Bader Alarjani’s Hemam app is breaking down barriers for people with disabilities, offering them improved access to transport services and greater inclusivity in daily life.
Al-Hammad, who has witnessed firsthand the dynamic shift in the entrepreneurial landscape of the capital, said that the surge in young changemakers in Riyadh “is driven by Vision 2030 and government support, aiming to diversify the economy and foster innovation” and, coupled with “increased access to venture capital, angel investors, and government grants, provides essential financial support, enabling the testing and scaling of innovative ideas.”
EntArabi plays a critical role in this ecosystem by supporting youth, highlighting their achievements, offering a comprehensive directory of startups and sharing founders’ stories to inspire others.
For aspiring entrepreneurs in Riyadh eager to embark on a journey of social innovation, Al-Hammad emphasized the importance of making use of the many government initiatives and grants available, especially in the early stages of the venture, as well as to harness the power of the media and storytelling.
“Skillful storytelling can attract support, motivate others, and enhance your venture’s influence,” he said.
In a city immersed in tradition, Morouj Meliebary is leading efforts to revitalize Riyadh’s cultural heritage and promote artistic expression.
The senior section manager for communication and engagement at the Royal Commission for Riyadh City is on a mission to transform the capital into a global art gallery.
She said: “The vision of Riyadh Art is to turn the city into a gallery without walls. We are physically and tangibly making a change, architectural changes, we are placing art across the city.
“And this art should represent the people who live in the city or the people who visit, the people who are part of this identity.”
Riyadh Art, one of the largest public art initiatives in the world, was launched in March 2019 by King Salman, under the supervision of the Committee of Grand Projects chaired by Crown Prince Mohammed bin Salman.
The culture expert added: “We have opened the door for youth, we want the youth to be part of this imprint. We have a lot of very young artists who participated in Noor Riyadh, and we always open the door for them to meet with more experienced artists who have been in the industry for much longer for them to learn from each other.
“The idea behind that is to have non-Saudi artists meeting with local artists and kind of exchanging culture.”
Noor Riyadh, a Riyadh Art initiative, is a citywide annual festival of light and art comprising public art installations across Riyadh city, including a diverse program of talks, tours, workshops and events.
Meliebary, a Saudi anthropologist who takes pride in her narrative of encapsulating the essence of a “society changemaker,” said that “inclusion is important because there’s so much that we share in common.”
Beyond the tangible artworks, the initiative has embraced digital platforms to boost its reach and allow for a transnational dialogue on art and culture.
This digital expansion is particularly significant for young Saudis, providing them with an opportunity to engage with and contribute to the worldwide art community, demonstrating “that Saudi is transforming, and they are the face of this change,” Meliebary said.
After using her passion for writing to publish her first book, Meliebary’s transition to the Royal Commission for Riyadh City further amplifies her influence, with an eye to improve inclusivity, sustainability and cultural enrichment.
Middle East luxury market outperforms global industry rate, says Chalhoub Group president
DUBAI: Leveling off in July 2023 and returning to normal on a global scale after a spike in consumption following the COVID-19 pandemic, the luxury market is currently witnessing “challenges requiring more collaborations among retailers, brands, developers, and between the private and public sector,” said Patrick Chalhoub, president of Chalhoub Group, in an interview with Arab News en Franҫais.
“We recovered quickly post COVID-19 and in 2021, luxury grew at a rate of 10-15 percent compared to 2019,” he added.
In 2022, the market grew by 20 percent, while in 2023, it recorded a 15 percent growth rate during the beginning of the year, before slowing down to a more normal growth rate of 7-10 percent during the fourth quarter for an overall growth of 11 percent.
Going forward, the trend is expected to be in line with rates seen at the end of 2023, with 6-8 percent in fashion and 10-12 percent in beauty, driven by an increased interest in skin care.
The Middle East, said Chalhoub, has “one of the highest growth rates in the world” for a market that only represents 3-4 percent of the worldwide market, growing at 4-5 percent.
There is a continued appetite for luxury and a renewed interest in the jewelry and watch segment, distinct from “revenge buying,” characteristic of the 2021 and 2022 consumption patterns.
“We feel more price sensitivity and a lesser gap in prices, which existed due to currency fluctuations. Today, customers are staying aware of pricing and are much more knowledgeable,” he added.
The share of wallet in luxury consumption diminished over the past years, with spending shifting toward travel, entertainment, and hospitality, particularly in Saudi Arabia.
The conflict in Gaza further triggered a slowdown in luxury spending due to an increased focus on humanitarian affairs since October 2023 and a slower events calendar compared to the same period last year.
Despite the current market environment, an appreciation for luxury for its own value — rather than luxury as a purchasing power tool — is emerging and is being felt further during the Ramadan season, driven by sustainable consumption and well-being.
“Consumers ask about the purpose of the brand and its sustainability in an active attempt to buy with purpose,” Chalhoub said.
“It makes our business more challenging but more sustainable in the long run. Less festive, more personal shopping, reassured by the brand but not to show off,” he added.
While e-commerce is still developing at a fast rate owing to its convenience, brick-and-mortar shops, which offer personal connection and engagement with customers, are making a comeback with retailers delivering quality service and unique experiences.
This is the objective of “The Visitor,” a new travel retail concept launched by the Chalhoub Group at King Abdulaziz International Airport in Jeddah in November 2023.
“The potential in Saudi Arabia is tremendous and evolving, not only in the Jeddah airport, which presents a huge opportunity owing to the traffic and customer loyalty,” Chalhoub said.
The project, in collaboration with the Jeddah Airport Authority, offers a world-class customer experience and leverages the Chalhoub Group’s knowledge of the market, consumer proximity, and experience in operating regional duty frees, supplying travel retail, and upskilling resources to meet the demand’s requirements and the disruption brought by new technologies, like artificial intelligence.
“I am satisfied with the initial results, in terms of layout, understanding the customer, product mix and offering … The finished product will be seen by early 2025,” he added.
The Middle East is home to a large young customer base “with an ability to spend on luxury, digitally connected, eager to learn and assert itself,” Chalhoub said.
The customer experience starts with the attractiveness not only of the shopping mall and the high street but also of the digital aspects. The objective is to inspire and engage customers digitally, which requires stronger collaborations, “key to deliver the kind of experience and journey which our customers are trying to get especially in the Kingdom,” Chalhoub said.
Maintaining price competitiveness, fighting against counterfeits, and mitigating the impact of supply chain disruptions are also key.
With new malls opening in the region — Marasi in Bahrain (February 2024) and Solitaire in Riyadh (expected in 2024) and Abu Dhabi (2025) — “there is a number of projects coming to the market, offering a better customer journey, and better collaboration between the various stakeholders,” Chalhoub said.
The group has taken initiatives to create incubators and accelerators for startups, encouraging research and innovation and an entrepreneurial mindset among its teams.
“The world is changing; the consumer is more empowered … We need to be forward-looking while remembering our values as a group centered around teamwork, inclusivity, and innovation,” he added.
The Chalhoub Group celebrates its 70th anniversary this year, and as it witnesses changes in the region and embraces both opportunities and challenges, it continues to shape the luxury landscape by bringing international names to the region and exporting its local expertise.
“Parfum d’Orient,” an Institut du Monde Arabe exhibition in partnership with the Chalhoub Group, several French partners, Christofle and Ghawali, portrays the Arabic origin of fragrances, inspired by the souqs of Jeddah.
“A transformative exhibition, tracing the origin of some of the scents from Arabia, (such as) oud, saffron, and roses from Damascus. Beyond the olfactory (aspect), there’s a sense of pride in identifying with the sources of these products,” said Chalhoub.
The six-month exhibition, which ended in Paris on March 17, will be moving to Riyadh in October 2024 for a second phase in collaboration with the Saudi Ministry of Culture.
RIYADH: Saudi Arabia’s real estate market is set for an upswing as high-net-worth Muslim individuals plan to invest $2 billion in Makkah and Madinah properties, a recent survey indicated.
The survey was conducted by Knight Frank, a global property consultancy, and published in the firm’s inaugural Destination Saudi report. It found that among the individuals interviewed, a whopping 92 percent HNWI are planning to acquire branded residential units in one of the two holy cities— Makkah and Madinah.
“The holy cities of Makkah and Madinah represent some of the most sought-after Saudi locations for property ownership among global HNWI. The chance to live not only in the Kingdom but in one of the holy cities is itself a key demand driver,” said Vera Zabelina, a research analyst at Knight Frank.
It would be pertinent to mention here that the Kingdom’s real estate market is bracing for changes in foreign ownership regulations, notably with the introduction of new premium residency visa options linked to real estate ownership.
The aim of these changes is to draw in international investments amid challenges of affordability and changing market dynamics. This aligns with the Kingdom’s Vision 2030 blueprint, which looks toward a future less dependent on oil revenues and emphasizes top-tier housing for its citizens.
However, with the requirement of properties valued at least SR4 million ($1.06 million) and outright ownership, along with an annual visa renewal fee of SR100,000, the full impact of these changes may be gradual rather than immediate, according to the report.
In the survey, the consultancy was able to quantify, for the first time, the depth of demand to own real estate in Saudi Arabia for Muslim HNWI, particularly in the two holy cities.
The survey included almost 506 HNWI from nine countries with significant Muslim populations with a personal net worth exceeding $500,000. The findings showed that 82 percent of the respondents were interested in owning real estate in Saudi Arabia.
The demand drivers, according to the Knight Frank, are Saudi Arabia’s perception as a good investment opportunity with 60 percent of the respondents indicating so, and the significant influence of cultural and religious reasons among potential buyers, with 45 percent citing this as a key factor.
For Muslims, a journey to Makkah and Madinah is often seen as once-in-a-lifetime experience. Thus, the opportunity to own property in these holy cities is understandably very enticing, the report added.
However, historical ownership laws have made this prospect impossible. Even with the introduction of the new premium residency visa linked to property ownership, owning real estate in Makkah or Madinah is currently restricted to a 99-year leasehold basis.
“While the new premium residency visa options still do not permit outright ownership of real estate in the holy cities, the prospect of a 99-year leasehold title will undoubtedly fuel a wave of new purchasing demand from Muslim majority nations,” according to Mohamad Itani, partner at Knight Frank.
This was evident in survey results with 84 percent of those interested in buying residential property in Saudi Arabia are focused on the holy cities.
Specifically, 40 percent are interested in Makkah, 19 percent prefer Madinah, and 26 percent have no specific preference. For those seeking a primary residence in Saudi Arabia, 58 percent lean toward Makkah, while 20 percent favor Madinah.
The main drivers for desiring property ownership in the holy cities were predominantly investment opportunities, with culture and religion also playing significant roles. Meanwhile, those interested in Madinah also cited work and business reasons as additional motives.
Survey results also revealed that the average allocated budget for a residential property in either of the holy cities amounts to $4.7 million, with total allocation by all 506 respondents totaling $2 billion. This underscores the substantial weight of international demand for real estate investments building overseas, according to the report.
According to Knight Frank’s analysis, the preference for cash payments among property buyers rises with personal wealth, ranging from 31 percent for those with under $500,000 net worth to 78 percent for those with over $3 million.
The opportunity for luxury housing and branded residences was further seen when 92 percent of surveyed HNWI Muslim respondents expressed eagerness to purchase such properties in the holy cities, with a spending appetite for branded residences that far exceeds the current apartment prices in these cities.
The potential arises from the scarcity of luxury housing in the desired holy cities, notably as the Thakher and Masar Makkah projects emerge as the sole planned giga developments with approximately 10,000 homes in the pipeline.
This represents a mere 1.5-2 percent of the total 660,000 units planned nationwide, indicating ample capacity for the real estate markets in the two cities, particularly Makkah, to accommodate a substantial influx of luxury housing.
Global HNWI were also found to be willing to commit substantially more, with 40 percent ready to invest over $10,000 per square meter for a branded home in Makkah, highlighting a significant market gap for high-end branded residences.
According to Knight Frank partner Faisal Durrani, “branded residences represent a significant area of opportunity for developers across the Kingdom, particularly given the high budgets among domestic branded residential purchasers. 69 percent of Saudis are interested in owning a branded residence … Furthermore, 55 percent of GCC HNWI are keen to secure branded residences in the Kingdom.”
“Clearly, the international wealthy feel the same, however a limited range of branded residences, lack of local financing options and no scope as yet for partial, or timeshare ownership remain key barriers,” he added.
The survey found that for potential buyers of branded residences in the holy cities, key factors that would increase their likelihood of purchasing include a desire for a wider selection of property types, and the availability of local financing options and fractional ownership options.
The desire to purchase a branded residence is primarily influenced by the expected high yield and investment potential, along with considerations for building maintenance, management, and the quality of service provision and amenities, as showed by the survey results.
Mohamad Itani, a Knight Frank partner and head of residential project sales & marketing, Saudi Arabia, said: “The management of branded residential purchases for the international HNWI should be a central consideration for developers. Remote purchasers will want to have peace of mind that their investments are well looked after and secure in a well-regulated environment.”
According to Knight Frank, branded residences are a rapidly growing sector in the Middle East’s real estate market, mirroring global trends among wealthy buyers seeking exclusivity.
Saudi Arabia is becoming a key market, with significant investment in branded offerings. According to the report, the region’s share of this market stands at 10 percent, indicating its increasing significance.
Knight Frank forecast a 120 percent increase in these properties by 2030, demonstrating confidence in the region’s real estate growth.
These properties offer unique allure, quality services, and premium amenities, attracting investors and ensuring asset appreciation. Owners enjoy exclusive benefits and a community of like-minded individuals.