PORTFOLIO
LOCAL REAL ESTATE INVESTMENTS
Retail
Red Sea Mall
Jeddah’s largest mixed-use retail development boasting a blend of local and international brands and a variety of cafes, restaurants, shops and entertainment.
Al Mahmal Center
a landmark shopping mall located in Al Balad, the historic district in Jeddah, which is classified as a UNESCO World Heritage site.
Residential
Current residential assets in multiple cities across the Kingdom including a gated community in Al Khobar.
Industrial
Warehouses in Jeddah and Jizan.
Strategic Land Bank
Sizable land bank of prime assets located across the Kingdom with mixed-use development potential or long-leased to strategic tenants.
REGIONAL REAL ESTATE INVESTMENTS
Commercial buildings and land bank held directly or through fund managers across multiple countries
outside of the Kingdom including Lebanon, UAE, Egypt, Bahrain, East Asia etc.
In keeping with SEDCO Holding’s new strategic direction, the Company’s Real Estate (RE) portfolio comprises three pillars – Investment, Development, and Asset Management.
With a shift towards the financial investor mindset, SEDCO Holding Real Estate Group (SHREG) takes a proactive approach in aligning RE initiatives with the overarching strategy and the objective of fulfilling a financial prerogative to shareholders.
SEDCO’s Real Estate today encompasses a land bank portfolio (49%), built assets (26%), RE Private Equity (11%), and Real Estate Investment Trusts (REITs) through SEDCO’s share in SEDCO Capital REIT. The built-assets portfolio boasts a strong position in the hospitality sector, followed by retail space, residential real-estate, and others.
Real Estate highlights 2023
The Company explored several key real estate investment transactions in 2023. Presently, we are in the final stages of concluding two further transactions that will reinforce the trajectory of RE projects into 2024/25, in line with our shift toward the role of a financial investor.
After receiving Board approval in 2023 to divest a large portion of the land portfolio classified as non-core, the Company commenced initiatives and explored opportunities for divestment that would enable and spur other RE projects in the following years. Placing an emphasis on cashflow generation, we have looked to recycle non-core assets through divestment into investment-generating opportunities and/or to develop core assets.
We are also setting up to incorporate infrastructure as a new asset class while analyzing potential for Public-Private-Partnerships and other evolving opportunities. Following the strategic decision to diversify beyond our dominant position in the Western region, the Company is focused on investments in Riyadh and other cities and in sectors poised for growth in the future.
Investment
Growth of SEDCO Capital’s Real Estate Investment Trust (REIT) in 2023, significantly benefited SEDCO’s Real Estate portfolio.
Development
The Point in Abha, a mixed-use development located on a land area over 75,000 sqm broke ground in mid-2023. It will comprise 250 hotel rooms and serviced apartments, 41 Food and Beverage (F&B) outlets, 150 retail establishments, healthcare, hypermarket capabilities, cinemas, a youth center, and public areas with water features and outdoor parks. The development is a joint venture between the Red Sea Markets for Real Estate Investments Asir, and the Tourism Development Fund (TDF). The Red Sea Markets Company operates as a subsidiary of SEDCO Holding. The project aligns with the Vision 2030 goals of boosting economic growth and positioning the Kingdom as a global tourism hub.
SEDCO development provides advisory services for an ultra-luxury hotel property (Four Seasons) in Madinah. The property comprises 246 rooms across a 13-floor building.
Overseeing design and feasibility for six
development projects, including 3 mixed-use developments, 1 retail project, 1 petrol station, and 1 land subdivision development. These projects cover key locations such as Mecca, Madinah, and Jeddah, with each project at a different stage of development, from feasibility to design tender phase and work commencement including geotechnical investigations and topographic survey.
Asset-Management
Efforts to leverage income-generating assets paid dividends in the last quarter of 2023 as we saw significantly boosted yields from asset management.
Restructuring operations, we appointed Hilton as the operator for The Galleria Hotel. This has proved to be a sound decision, resulting in positive financial results.
Existing commercial real estate (office buildings) were repositioned to double the income generated from upgrades and renovations.
Real Estate Outlook for 2024
The Government remains the largest real estate player in the market, and as government institutions are expected to partner with the private sector for provision of capital and diversification of risk, we will actively seek collaborations through public funds and semi-government entities.
Improving market returns, cash yield generation, portfolio growth, and establishment of partnerships with top-tier developers are all on the agenda in the coming years. Consolidation of our real estate capabilities promises to support execution, avoid delays, provide greater leverage in negotiations with third-party developers, and release management bandwidth to enable higher focus on core investment activities; while strengthening SEDCO’s brand in the real estate market.
