Real estate is getting cooler

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WHAT WE’RE TRACKING TODAY

The countdown to Hajj season

Good morning, ladies and gents. We’re less than five weeks away from the Hajj season, and pilgrims have already started arriving in the Kingdom.

War is the backdrop for the holy season this year, for the first time in decades. The US advised its Muslim citizens to reconsider Hajj this year, while the UK, Australia, India, Indonesia, and others issued less severe cautionary advisories.

It’s too early to tell: The extent to which security fears and regional travel disruptions will affect the Hajj season will depend on developments as we move closer to Eid Al Adha.

Today’s big story is a positive one: Real estate prices declined for the second quarter in a row, a reversal from the sharp trend that weighed on home affordability in the past few years and signaling that the flurry of real estate reforms might be working as intended. Let’s dive in.

Happening today

#1- It’s day two of the Sports Investment Forum held in Riyadh. The first day saw a number of agreements signed, including a SAR 1 bn agreement for developing for the planned Dammam Sports City in the Eastern Province, involving the Sharqia Development Authority, Dammam Valley, and the Ministry of Investment, Aleqtisadiah reports. Dammam is also getting SAR 15 mn in sporting events, the Sharqia Development Authority said at the forum.

#2- Syrian President Ahmed Al Sharaa is in town as part of a wider Gulf tour, Syrian state-run news agency Sana reports. During his time in the Kingdom, he is expected to meet with Crown Prince Mohammed bin Salman to discuss ways to boost ties.

WEATHER- Rain is settling in: Northern Borders and Al-Jawf can expect moderate to heavy thunderstorms, while Medina, Hail, Qassim, Riyadh, and the Eastern Province continue to see moderate to heavy rainfall with potential for flash floods, hail, and dust-kicking winds.

Riyadh: 32°C high / 20°C low;
Jeddah: 33°C high / 25°C low;
Makkah: 36°C high / 26°C low;
Dammam: 30°C high / 23°C low.

Watch this space

INVESTMENT WATCH — Sudanese-Saudi investment in the works? Preparations for a Sudanese-Saudi business forum to be held in Riyadh this June are underway, Sudanese government officials told the Sudan Tribune. Some 100 strategic partnership projects totaling over USD 50 bn are in the cards, spanning sectors like agriculture, energy, minerals, infrastructure, and technology, the outlet says.

The news came as Crown Prince Mohammed bin Salman met with Sudan’s Army Chief Abdel Fattah Al Burhan in Jeddah yesterday, where the two discussed “ensuring Sudan's security and stability,” state news agency SPA reports.

Business could be booming — but defense is another matter. Pakistan reportedly put a USD 1.5 bn defense agreement to supply weapons and jets to the Sudanese army on hold after Saudi Arabia declined to finance the agreement, two Pakistani security sources and a diplomatic source told Reuters. The agreement — which had been in its final stages earlier this year — comes as Islamabad looks to boost arms exports following increased visibility of its systems after last year’s clashes with India.

Shifting dynamics: The move might be reflecting a recalibration of the Kingdom’s regional strategy to support the armed forces in the North African country, where fighting between the army and the Rapid Support Forces has created one of the world’s worst humanitarian crises, the news outlet says.

More agreements at risk? The Sudan agreement is not the only one under scrutiny. A separate USD 4 bn defense agreement with Libya’s eastern-based forces is also reportedly in jeopardy as Saudi Arabia reassesses its involvement in the region.

Data point

5.9% — that’s how much the Kingdom’s Operating Revenues Index rose y-o-y in February, according to Gastat’s Short-Term Business Indicators report (pdf). The annual increase was driven mainly by gains in mining and quarrying (6.5%), wholesale and retail trade and motor vehicle repair (9.1%), construction (5.1%), and financial and ins. activities (15.5%). The only sector to contract was electricity, gas, steam, and air conditioning, which fell 13.7% y-o-y.

ALSO- The Employees Compensation Index increased 9.8% y-o-y. Meanwhile, issued building permits dropped 18.8% y-o-y, even as construction compensation rose 7.6% annually.

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The big story abroad

US-Iran talks are reportedly on track for later this week in Islamabad. Tehran will reportedly dispatch a negotiating team today, though it remains unclear who will lead it. US President Donald Trump said the two-week ceasefire will expire on Wednesday evening Washington time and that an extension is unlikely.

Meet Apple’s new CEO: After much speculation about who would lead the iPhone maker after CEO Tim Cook steps down, Apple’s board of directors has named John Ternus, the current senior vice president of hardware engineering, to lead the tech giant starting in September. Cook will become executive chairman of the board.

In other tech news: Amazon and Anthropic will spend over USD 100 bn on AI infrastructure over the next 10 years, as per a new agreement to secure up to 5 GW of new capacity to train and run Claude — the hottest AI application at the moment.

AND- Warsh faces the Senate. The Senate confirmation hearing for Fed Chair nominee Kevin Warsh is scheduled for today, marking the first major test for the Trump nominee. We will be closely watching what he says about reshaping monetary policy amid a shifting global economy. Warsh is expected to navigate a narrow path between the White House’s push for lower rates and Wall Street’s fears regarding Federal Reserve independence.

What to expect: Warsh is expected to tell senators that the Fed’s independence is not “particularly threatened when elected officials… state their views on interest rates,” according to remarks seen by the Financial Times. He will also emphasize the importance of the Fed’s independence in setting rates to keep inflation in check.

Staying cool

The Real Estate Price Index extended its decline into 1Q 2026, falling 1.6% y-o-y, according to the latest report (pdf) from the General Authority for Statistics. This follows a 0.7% y-o-y decline in the previous quarter — the first annual drop in five years.

The capital is finally cooling down: Riyadh’s 4.4% price dip signals that the government’s real estate reforms aimed at resolving the affordability problem — such as the White Land Tax and rent freezes — are starting to reduce the property premium.

Regionally, Al Baha recorded the steepest decline in real estate prices, down 9.2% y-o-y, followed by Hail (down 8.0%), the Northern Borders (down 6.6%), and Al Qassem (down 5.1%). Makkah edged down 0.7%. Some regions, however, moved against the broader trend, led by the Eastern Region, which rose 6.9% y-o-y, followed by Najran (up 3.5%), Tabuk (up 1.5%), and Aseer (up 1.1%).

By the sector: The residential sector accounted for the bulk of the downturn, where prices fell 3.6% y-o-y during the quarter. Within the segment, villa prices recorded the steepest drop at 6.1%, followed by land prices (down 3.9%) and apartments (down 1.1%). Floor prices, however, moved slightly higher, edging up 0.6%.

Commercial and agricultural sectors bucked the trend: The commercial sector rose 3.4% y-o-y, supported by a 3.6% increase in commercial land prices and a 2.6% rise in building prices, although showroom prices fell 3.5%. Agricultural property also maintained strong momentum, climbing 11.8% y-o-y in 1Q 2026.

On a quarterly basis, the index slipped 0.2%, driven by a 2.3% drop in commercial property prices, reflecting declines across land, buildings, and retail units. Residential prices, however, rose 0.5%, supported by gains in land, apartments, and floors, even as villa prices fell 6.2%.

Skyfall

The Gulf aviation industry’s biggest strength became a liability during the war. For the past decade, Gulf air carriers have built around a simple but powerful idea: the hub-and-spoke model. Instead of flying passengers directly between cities, airlines funnel travelers from multiple “spoke” cities into a central hub — Dubai, Doha, or Abu Dhabi — before redistributing them onward. The system has allowed carriers to aggregate demand, make the most efficient use of their fleets, and offer long-haul routes on a frequency that wouldn’t be viable if they ran point-to-point.

By perfecting this model, Gulf carriers turned their cities into global crossroads, capturing a significant share of the Asia-West corridor and intensifying competition for legacy airlines such as Lufthansa.

But the war has put the model under a structural stress test. The model assumes stability and consumer confidence — and during the war, airlines and passengers alike are rerouting around the Middle East altogether, giving rise to nascent alternative routes — and if these prove sticky even after conditions stabilize, regional carriers could face real competition.

What made this disruption stand out is that it is not just a traffic shock, but a network efficiency shock, Sindy Foster, principal managing partner at Avaero Capital Partners, tells EnterpriseAM. “The hub model depends on tightly synchronized connection banks, and when that breaks, revenue deteriorates faster than costs,” Foster adds.

“At peak disruption, close to 80% of Asia-Europe services via the Gulf were effectively removed,” Foster says, adding that “the gap left behind is larger than the rest of the system can absorb in the short term.” Avaero provides strategic, commercial, and investment banking advisory services to the aviation and aerospace industry across emerging markets.

Foster figures Gulf carriers are losing an average of USD 625-750 mn each week, going by “disclosed revenue run-rates and observed capacity reductions. That scales to roughly USD 8 bn over three months and USD 30 bn or more over a year if conditions persist.”

Gulf majors have good reasons to worry if the ceasefire doesn’t hold. Some of the flow that once moved through Dubai, Doha, and Abu Dhabi may shift elsewhere, Edmond Rose, aviation consulting director at ASM Global Route Development Consultants, tells EnterpriseAM. More airline networks outside the Middle East are likely to redeploy capacity to capture demand that would otherwise flow through Gulf hubs, he adds.

And even as the ceasefire helps regional airlines restore some of their pre-war activity, we’re still far from a return to pre-war frequencies and volumes. The GCC’s top three — Emirates, Etihad, and Qatar Energy — entered the ceasefire with some 18k flights and 5.4 mn seats are still missing from April’s pre-war schedule, and many of the high-frequency routes on the Europe-Asia corridor are still seeing flight reductions ranging from 5-40%, according to data from aviation analytics outfit Cirium.

Still, the Gulf model’s underlying economics — scale, connectivity, and cost efficiency — are intact, Foster tells us. That could change, however, if the war drags on: “If disruption extends into a 6-12 month window, behaviour begins to shift — corporate travel policies adjust, passengers avoid perceived risk corridors, and airlines start reallocating aircraft more permanently,” Foster said.

With the ceasefire (mostly) in place, how recovery unfolds will come into focus. “Recovery will come in two phases. Schedules can recover relatively quickly once airspace stabilises — but demand will follow only if confidence returns,” she adds.

The brutal math of the detour

The immediate hit to end-of-season earnings will be defined by the cost of the detour. Rerouting a single long-haul flight around restricted airspace could add up to two hours of block time. According to industry cost-modeling, this adds USD 7.5k in unbudgeted fuel and crew costs per flight hour. With fuel prices trending upward globally, the fuel burn penalty of a two-hour detour is becoming the primary driver of margin erosion for the quarter.

At the same time, war-risk ins. is becoming a key differentiator: While non-Gulf carriers are being quoted USD 70k–150k per flight into the region, Emirates has secured fleet-wide coverage of roughly USD 100k per week — allowing risk to be priced across its network rather than per rotation, materially lowering its marginal cost base.

Gulf carriers benefit from structurally more favorable ins. terms — supported by sovereign backing, scale, frequency of operations, and closer coordination with local regulators — creating a cost advantage even amid disruption.

What’s next

Watch for the recovery to take one of two trajectories, depending on whether the current ceasefire will last.

Scenario A is a quick-ish bounce-back: This scenario assumes that the most intense disruption has peaked, with a full restoration of regional supply and traffic likely not to occur until the summer months. Airlines will still suffer from rising costs due to crude flow disruptions through 2Q, with unhedged jet fuel prices expected at USD 140-150 per barrel.

Scenario B? The ceasefire breaks and we have a long-term slump. If the conflict persists, volumes drop and stay down — and we may have serious challenges to the Gulf’s main carriers.

In either recovery scenario, keep an eye on the next frontier of competition. The main medium-to-long term risk for GCC carriers now is not just losing market share — It’s losing the share that matters the most for their revenues, and that is higher-yield traffic.

Hormuz closure lets alternatives shine

Shippers are testing alternatives that prioritize reliability as Hormuz becomes a high-risk passage.

Port of Neom is emerging as one of the main Red Sea relay points — as shippers test a Europe-Egypt-Gulf workaround. The route combines trucking and ferry links (land and sea) to move time-sensitive cargo into GCC markets, and is already being used by European exporters targeting the UAE, Kuwait, Iraq, and Oman.

A hybrid bridge: The corridor builds on a RoPax link launched by Pan Marine between Egypt’s Safaga and Neom — which creates a relay system connecting Mediterranean inflows with Gulf-bound demand without routing everything through a single maritime lane.

MEANWHILE- Saudi Arabia and Jordan will activate a joint committee to study a rail link that runs through Syria, calling for route option studies and technical alignments. The line would cover Jaber (Jordan-Syria) and Al Omari (Jordan-Saudi), plugging Jordan into a north-south freight spine.

BACKGROUND- The kingdom already has 5.5k km of rail reaching the Jordanian border, Transport and Logistics Minister Saleh bin Nasser Al Jasser said, making this an extension play. The rail push also follows a 1.7k km Saudi freight corridor already linking King Abdulaziz Port, King Fahd Industrial Port, and Jubail Commercial Port to Al Haditha Port on the border with Jordan — already building on the southern leg.

Why this matters: Saudi is stacking routing alternatives in multiple directions as risk reshapes trade flows. “In an interconnected world, resilience is not a luxury; it is the entry ticket to lasting growth,” Wolfgang Lehmacher, former head of supply chain and transport industries at the World Economic Forum previously told EnterpriseAM.

Construction begins on AlUla luxury hotel, Signit secures USD 15 mn

PIF’s AlUla Development breaks ground on Numaj hotel

PIF-backed AlUla Development Company (UDC) kicked off construction on its luxury hotel Numaj, according to a press release. The 250-key hotel, set to open in 2027, is being developed by UDC and will be operated by Marriott International under the Autograph Collection brand. The GioForma-designed hotel will feature dining venues, wellness facilities, and business and leisure spaces.

Why it matters: The project signals that UDC is moving from planning to execution, with AlUla shifting toward active delivery after years of development work.

Signet bags USD 15 mn to build out its contract lifecycle management platform

AI-driven contract management firm Signit secured USD 15 mn in a Series A funding round, it said in a press release. The round was led by Raed Ventures, with participation from STV, Seedra Ventures, Takamol Ventures, and Suhail Ventures. Founded in 2021, Signit is a licensed trust services provider offering binding electronic signatures and integrated contract management services.

Use of proceeds: The funding will be used to upgrade Signit’s technology stack and expand AI capabilities across contract drafting, negotiation, and tracking, aiming to build a unified contract lifecycle management platform. It will also support the development of a smart contract assistant and enhancements to its digital certificate infrastructure.

Stablecoins stir dollarization fears across emerging markets

Central bankers are worried that the USD is staging a digital coup. The growing use of USD-linked stablecoins is accelerating dollarization in emerging markets — outpacing regulators and weakening central banks’ control over monetary policy — while also creating new channels for tax evasion and cybercrime, the Financial Times reports.

SOUND SMART- Stablecoins are crypto tokens pegged to fiat currencies like the USD. They are gaining ground as a low-cost, near-instant alternative to traditional cross-border transfers.

These assets are taking off in emerging markets: In several EMs, stablecoins are already grabbing a “significant share” of the transaction pie, the IMF’s Tobias Adrian said. People are using them to hedge against local inflation and currency depreciation and to bypass government restrictions on access to foreign currency.

By the numbers: Standard Chartered expects stablecoin EM holdings to jump to USD 1.22 tn by 2028 from USD 173 bn currently, with growth concentrated in financially stressed economies like Egypt, Pakistan, and Bangladesh.

Why regulators are worried

Evicting the local currency: Dollarization can limit central banks’ control over money supply and policy, making it vulnerable to US monetary shifts and posing “serious risks for financial integrity,” Bank for International Settlements chief Pablo Hernández de Cos said.

A very one-sided market: Around 98% of the USD 315 bn stablecoin market is USD-denominated, spurred in part by US policy moves integrating the sector into the regulated financial system.

Beyond policy issues, there’s a growing crime problem: Stablecoins open “new avenues for tax evasion”, Hernández de Cos said, citing estimates that they account for most illicit crypto transactions. The Financial Action Task Force has likewise warned that stablecoins were “attractive for criminal misuse” and increasingly used to launder proceeds from ransomware, phishing, and other cyber-enabled crimes.

The response plan

Regulators playing catch-up: The pace of global rule-making for stablecoins has slowed, with Bank of England Governor Andrew Bailey warning that regulators will soon have to “come to terms” with their growing use — particularly where they replace domestic currencies in everyday transactions.

But policy responses are emerging: Countries can counter dollarization risks by strengthening macroeconomic frameworks, said deputy head of the IMF Dan Katz. Brazil has already moved to regulate stablecoin providers under anti-money laundering rules and imposed a USD 100k cap on many foreign transfers.

The BIS is building alternatives: The bank is working with central banks and commercial lenders on potential alternatives to stablecoins, including tokenized bank deposits designed to offer similar speed and efficiency without ceding monetary control.

MARKETS THIS MORNING-

Hopes of easing tensions between the US and Iran, amid reports that the two sides are at the negotiation table this week, pushed stocks higher this morning. Japan’s Nikkei and South Korea’s Kospi are both up over 1% in early trading. Over on Wall Street, markets are expected to open higher, with futures in the green.

TASI	11,367	-0.9% (YTD: +8.4%)
MSCI Tadawul 30	1,528	-0.9% (YTD: +10.2%)
NomuC	22,864	-0.9% (YTD: -1.9%)
USD : SAR (SAMA)	USD 3.75 Sell	USD 3.75 Buy
Interest rates	4.25% repo	3.75% reverse repo
EGX30	51,813	-1.1% (YTD: +23.9%)
ADX	9,842	-0.8% (YTD: -1.5%)
DFM	5,862	-2.1% (YTD: -3.1%)
S&P 500	7,109	-0.2% (YTD: +3.7%)
FTSE 100	10,609	-0.6% (YTD: +6.6%)
Euro Stoxx 50	5,983	-1.2% (YTD: +2.3%)
Brent crude	USD 95.48	+5.6%
Natural gas (Nymex)	USD 2.67	-0.7%
Gold	USD 4,842	+0.3%
BTC	USD 75,866	+2.8% (YTD: -13.4%)
Sukuk/bond market index	923.11	+0.6% (YTD: +0.4%)
S&P MENA Bond & Sukuk	152.1	+0.3% (YTD: +0.1%)
VIX (Volatility Index)	18.87	+8.0% (YTD: +26.2%)

THE CLOSING BELL: TADAWUL-

The TASI fell 0.9% yesterday on turnover of SAR 5.1 bn. The index is up 8.4% YTD.

In the green: Jarir (+3.3%), Cherry (+3.1%), and Astra Industrial (+2.6%).

In the red: Care (-4.6%), Saudi Cable (-4.5%), and SRMG (-4.4%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.9% yesterday on turnover of SAR 24.9 mn. The index is down 1.9% YTD.

In the green: Lana (+9.3%), Apico (+8.8%), and Shalfa (+6.9%).

In the red: Leaf (-7.0%), Riyal (-6.3%), and Armah (-6.1%).

CALENDAR

APRIL

20-22 April (Monday-Wednesday): Sports Investment Forum (SIF), Riyadh.

MAY

3-9 May (Sunday-Sunday): The Global Sustainability Expo, The Arena Riyadh Venue.

19-21 May (Tuesday-Thursday): The Saudi Entertainment and Amusement Expo, Riyadh Front Exhibition and Conference Center.

24-28 May (Sunday-Thursday): Eid Al Adha holiday.

JUNE

15-17 June (Monday-Wednesday): Aluminum Arabia, The Arena, Riyadh.

21-24 June (Sunday-Wednesday): Saudi Food Exhibition and Conference, Riyadh Front Expo.

21-24 June (Sunday-Wednesday): Saudi Print & Pack, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Riyadh International Industry Week, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Plastics & Petrochem, Riyadh International Convention & Exhibition Center.

21-24 June (Sunday-Wednesday): Saudi Smart Logistics, Riyadh International Convention & Exhibition Center.

22-24 June (Monday-Wednesday): The Future Hospitality Summit, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

JULY

6 July-23 August (Monday-Sunday): Esports World Cup, Riyadh.

AUGUST

31 August-3 Sep (Monday-Thursday): Leap Tech Conference, Riyadh Exhibition & Convention Center - Malham.

SEPTEMBER

9-10 September (Wednesday-Thursday): Procurement and Supply Chain Futures Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

9-10 September (Wednesday-Thursday): Real Estate Supply Chain Forum, Mandarin Oriental Al Faisaliah Hotel, Riyadh.

15-17 September (Tuesday-Thursday) The Global AI Summit, King Abdulaziz International Convention Center, Riyadh.

23 September (Wednesday): Saudi National Day.

OCTOBER

12-15 October (Monday-Thursday): World Energy Congress, Riyadh.

26-28 October (Monday-Wednesday): ACHEMA Middle East, Riyadh International Convention & Exhibition Center.

NOVEMBER

24-28 November (Tuesday-Saturday): Aero Middle East and Sand & Fun, Thumamah Airport, Riyadh.

Signposted to happen sometime in 2026:

2H: Sabic’s USD 6.4 bn Fujian project in China to start production;
September: Saudi Paper and Packaging Expo, Riyadh International Convention & Exhibition Center;
November: The UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia;
November: The Esports Nations Cup, Riyadh;
The World Economic Forum’s Global Collaboration and Growth Meeting, Jeddah;
SkyMove Air Cargo MENA, Riyadh;
The Intervision international music competition will take place in Saudi Arabia.

Signposted to happen sometime in 2027:

The World Water Forum takes place in Riyadh;
The Ocean Race finishes in Amaala on the Red Sea;
Riyadh-Kudmi transmission line to be completed;
Capital Markets Forum takes place in March in Riyadh.

Signposted to happen sometime in 2Q 2027:

The Hail Region Water Networks Project is expected to be completed.

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