With expectations high on earnings to be reaped from investments into various infrastructure projects linked to the Saudi Arabia Vision 2030 policy push, GIB Capital is giving extra focus to growing its Shariah alternative investments portfolio.
Client Investment Advisory Head Abdullah Al Hamed told IFN Investor that opportunities ripe for tapping extend way beyond the estimated US$1.3 trillion worth of various government infrastructure projects already announced and currently being implemented.
“There is a lot of enthusiasm about the tourism sector, which was established from almost nothing five years ago. We have already surpassed 70 million visitors to Saudi Arabia in 2023 and the latest target is for 150 million tourists coming to Saudi Arabia by 2030.”
Such a lofty forecast entails the quick need for necessary tourism facilities like hotels and hospitality venues, explained Abdullah, adding that GIB Capital is in the process of facilitating investors keen to participate in this rapid growth sector potential.
“We started the Alternative Investment Division, where we now have four real estate funds under development with three of them having received the initial CMA (Saudi Arabia Capital Market Authority) approval.”
GIB Capital decided to focus on this sector as many of the mega projects being driven by government authorities are already sapping financial resources available in domestic banks and financial institutions.
The firm’s real estate funds will focus on financing private sector project developments to obtain capital gains when the projects are completed and sold, mainly around Riyadh and Jeddah.
Another strong growth sector is apparent with spiking interest in commercial properties and offices – especially for outfits involved in supporting the Vision 2030 policy – together with Saudi Arabia’s invitation to major companies in the GCC region to shift their headquarters to Riyadh, noted Senior Investment Manager Omar Alissa.
“For the first time, presold Class A offices in Riyadh reached unprecedented levels, closing on 95% to 98%. Within the next two years, we are expecting more supply to come in to meet this massively growing demand.”
Stating that the private equity sector in Saudi Arabia is not mature enough yet compared to more developed markets in other regions, Abdullah expressed confidence in the strong profit potential of alternative investments strategies – mainly within the real estate and debt issuance space.
