For King Abdullah Economic City (KAEC), 2019 was a year of action and implementation.
It was marked by collaboration with a number of key government entities, the establishment
of strategically important sectors, the signing of new partners and tenants, and landmark
developments in hospitality, energy and logistics.
Over the period, the city has further strengthened and consolidated its position as a preferred choice for foreign direct investment and as a modern lifestyle destination for families and young professionals. The progressive socio-economic changes that have taken place in Saudi society during the year have also served KAEC well as it builds an international reputation for modern city living.
Under the patronage and leadership of the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al-Saud, and His Royal Highness Prince Mohammad Bin Salman, the Crown Prince, the Kingdom’s Vision 2030 continued to transform Saudi Arabia’s economy towards prosperity, sustainability and opportunity for all.
This annual report outlines how the central tenets of Vision 2030 have guided KAEC’s operating strategy over the past year – a plan geared towards quality of life, global standards of education and healthcare, and an enabling infrastructure. These fundamentals have empowered all who work and live in the city to be part of a highly sought-after destination for modern-day living, commerce and industry.
Building on 2018’s landmark investments in critical transport, logistics and connectivity infrastructure, 2019 saw the world’s eyes drawn towards KAEC and the Kingdom as an open and accessible destination for leisure, tourism and sport, as well as a place to raise happy and healthy families. Traditional Saudi values of togetherness, community, peace and security were placed side-by-side with social and economic developments that opened this society’s doors to the world.
The residential real estate sector enjoyed significant growth in supply and sales in 2019, with the launch of several new developments and an 86 percent surge in orders – which reached SAR 658 million – up from SAR 354 million in 2018. This growth was achieved despite operating in a subdued housing market, which affected prices and payment terms.
In addition, KAEC faced higher fees as a result of increases in loan balances, lower capitalization of borrowing costs, and higher capex against new operating assets in hospitality and leisure. Combined, these factors contributed to overall losses for the year.
Whilst the short-term prospects for the financial and real estate markets remain uncertain because of fallout from the COVID-19 pandemic, we remain optimistic for the medium-to-long term thanks to government confidence in KAEC and a pro-growth national policy framework.
I offer sincere thanks and appreciation to the Board of Directors and all our shareholders who have made a lasting contribution to KAEC’s place in the world. On behalf of the Board, I extend my deepest appreciation and gratitude to the Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al Saud, to the Crown Prince, His Royal Highness Prince Mohammad Bin Salman Bin Abdulaziz Al Saud, and to all government ministries.
I wish continued success for all employees and investors of KAEC and look forward to sharing our continued success in 2020 and beyond.
H.E. Mohamed Alabbar
Chairman
