In keeping with SEDCO’s financial investor mindset, our Real Estate investments are proactively aligned with the Group’s priorities and strategy. This synergy carries the overarching objective to fulfill a financial prerogative for our shareholders, through a portfolio that delivers sustainable, long-term value.
Strategy and Philosophy
Our Real Estate (RE) strategy is designed to deliver a well-balanced portfolio through sectoral and geographical diversification, with activation of our land bank, strategic partnerships and acquisitions, and expansion into new asset classes.
Our capital structure is optimized through multiple funding sources and potential divestment of non-core assets, where appropriate, to create a stable cash flow base to fuel portfolio growth through acquisitions and our own ambitious "build-to-core" development pipeline.
The Real Estate Group took a transformative leap in 2025 with the launch of Sedal, a wholly-owned, independent real assets arm that centralizes investment, development, and asset management under a single, agile governance structure.
The launch of Sedal marked a pivotal phase of execution in the Real Estate Group’s FY23-27 Strategy and Business Plan. Having received approval to carve out the Group’s RE functions and create a new subsidiary, we launched Sedal with a robust and unitary asset-class focused organizational and governance framework to empower our teams to achieve strategic objectives and deliver strong returns for our shareholders. Appropriately, new and revised policies and procedures were also drafted for all three arms of business. These steps will enable greater transparency in reporting while maintaining accountability, as we pivot toward a focused, disciplined investment approach aligned with Saudi Vision 2030.
Performance
The year under review was marked by significant progress in our development pipeline and strategic asset management, leveraging a high-quality portfolio of income-generating assets to navigate a maturing regulatory environment. In late 2025, the transition of RE functions into Sedal was a strategic move to optimize our Net Operating Income (NOI) yields, with a long-term goal of increasing these yields from 5.0٪ to 6.4٪ across the portfolio.
Moreover, over one-third of the vacant land bank portfolio was either activated for development or divested. Another quarter of this vacant land bank was resolved in terms of transactability (and issuance of electronic title deeds), positioning it for imminent development or divestment for capital redeployment to assets and opportunities that are a better strategic fit. As a result, the Real Estate Group was able to activate over half of the vacant land bank for portfolio transformance.
The Group reported strong overall performance with NOI achievement within targets, driven by exceptional results across key assets-Al Bawadi, Al Mahmal Center, and Galleria- and supported by strong portfolio-wide initiatives contributing to outperformance of Elaf Kinda and Bakkah Hotel.
Occupancy rates at Al Bawadi increased from 84٪ to 100٪ and Al Mahmal Center reached 99٪ occupancy (compared to 67٪ in 2023), complemented by improved rental rates and optimized operating expenses. Galleria’s performance also exceeded the approved budget for the first time, as leasing vacant retail units generated strong rental income.
At the end of the reporting year, our portfolio remains well-balanced, blending stable income-generating assets with high-growth development projects.
| Asset type | Weight in Portfolio (٪) |
| Vacant Land Bank | 27.60 |
| Built Assets | 25.30 |
| RE Private Equity | 17.44 |
| Assets Under Development | 16.56 |
| Leased Land | 9.55 |
| REITs | 2.48 |
| RE Private Funds | 1.07 |
Sustainable Value Creation
Our RE investment strategy and achievements are built on SEDCO’s long-term ethos of creating value for all stakeholders.
Our RE sustainability strategy is anchored in five core principles that ensure every development is commercially viable, environmentally responsible, and socially inclusive.
We prioritize high-performing, future-ready designs that minimize resource consumption and environmental impact.
During the construction phase, we focus on reducing environmental impact, supporting local supply chains, and maintaining rigorous on-site efficiency.
Our data-driven insights and monitoring ensure long-term visibility and accountability in asset performance.
Our developments are designed to be inclusive, accessible spaces that reflect the diversity of their end users.
Through dedicated governance structures and responsible strategic partnerships, we ensure that ESG goals remain active and auditable throughout the entire asset life cycle.
- For the Kingdom, our residential developments promote sustainable urban living and contribute to the Saudi Vision 2030 homeownership target of 70٪.
- For our end users, the communities, the five core principles ensure new developments are not just commercially viable, but also inclusive, accessible, and environmentally sustainable.
- For investors and partners, our robust governance structure, clear implementation roadmap, well-defined Key Performance Indicators (KPIs), financial models, and insights from leading developments in Saudi Arabia and around the globe, ensure these complex, multi-year projects are managed with the highest level of transparency and risk oversight.
Portfolio Overview
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 Bawadi Center
A traditional retail souq serving as a bustling hub for both locals and tourists seeking a diverse array of products and an authentic Arabian shopping experience in Jeddah.
Al Mahmal Center
A landmark shopping mall located in Al Balad, the historic district in Jeddah, which is classified as a World Heritage Site by UNESCO.
Kinda Hotel
Located within 500m from Holy Mosque in Makkah, this upscale hotel operated by Elaf offers convenience of proximity to pilgrims given its prime location.
Bakka Hotel
Operated by Elaf, this midscale hotel offers a convenient affordable destination for pilgrims within a 15-min drive to the Holy Mosque in Makkah.
Galleria Hotel
It’s the first hotel launched by Hilton under its Curio Collection brand – blending Italian architecture with Hejazi culture.
Al Nakheel Center
Commercial complex in Jeddah offers a variety of retail outlets and office spaces in the heart of the city in Al Hamra district.
Real Estate Investment Highlights 2025
X 4 Bn. portfolio of projects across diversified infrastructure sectors. With a healthy pipeline, the Company has clear visibility of upcoming local and regional opportunities in the social, transport, utilities (wastewater), and critical infrastructure sectors.
In 2025, the Saudi Arabian real estate sector has been characterized by a strategic regulatory reset, where government intervention and Saudi Vision 2030 initiatives have begun to align market pricing with long-term stability.
Sectoral Market Dynamics
- Commercial and office: Riyadh’s office market remains exceptionally tight with a 98% occupancy rate. The government’s Regional Headquarters (RHQ) program continues to drive demand, resulting in a 15% year-onyear rental appreciation for Grade A spaces. To secure prime space in this competitive landscape, companies are increasingly adopting early pre-leasing strategies.
- Residential: While villas in Riyadh saw a 11.6% year-on-year price increase, the government introduced a five-year rent freeze on existing and new leases in the capital (effective September 2025) to manage affordability. This move is expected to stabilize cost-of-living pressures and shift the market toward long-term rental yield rather than short-term inflation.
- Retail: Rents in Riyadh have remained stable despite increased consumer spending. The sector is evolving toward integrated, experiential mixed-use projects such as Diriyah Square. A significant supply wave of 800,000 sqm over the next five years is expected to sharpen competition, particularly in Northern Riyadh.
- Hospitality: The sector saw a 10% increase in Revenue per Available Room (RevPAR) and a 11% jump in occupancy, supported by over 32 million tourists during the 2025 summer program. The easing of COVID 19 restrictions has also contributed. The strategic focus remains on localizing luxury rooms, with Public Investment Fund (PIF)-backed brands launching across giga-projects such as Qiddiya City.
- Logistics: Underpinned by a 4.9% year-on-year growth in non-oil industrial activities – the Kingdom’s strongest economic expansion in two years, the logistics sector is undergoing rapid structural transformation. Riyadh industrial rents surged 16% year-on-year with occupancy hitting 98%, underscoring a critical national shortage of modern Grade-A facilities.
As we enter 2026, the market is shifting from speculative growth to a yield-focused environment, creating unique opportunities for disciplined investors such as SEDCO. Despite market uncertainties driven by factors such as the rent-freeze and white land fees, we see a unique opportunity for portfolio growth through acquisitions and build-to-core strategies, as land prices normalize through market correction.
