NEOM replaces CEO amid megaproject’s delays, rising costs
Saudi Arabia’s banner NEOM project is getting a management shake-up.
The Public Investment Fund-owned company running the kingdom’s $500 billion development along the Red Sea coast announced the departure on Tuesday of CEO Nadhmi al-Nasr.
The move follows months of reports on rising costs and delays for the megaproject, which aims to build a 110-mile linear city called The Line for 9 million people and has been a centerpiece of Crown Prince Mohammed bin Salman’s Vision 2030 blueprint for modernizing the Saudi economy.
Aiman al-Mudaifer, the head of PIF’s Local Real Estate Division since 2018, was named as NEOM’s acting CEO. “As NEOM enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project,” the company said in a statement.
In his role at PIF, Al-Mudaifer oversees all local real estate investments and infrastructure projects, and he is a board member of several prominent companies in the kingdom.
While changing seats at the top, NEOM also announced on Tuesday that it has hired three international consultants for city planning, design and engineering roles connected to The Line. The firms are Austria’s Delugan Missl Associate Architects, San Francisco-based Gensler and Mott MacDonald in the U.K.
Saudi Arabia’s annual ‘Davos’ conference gets started in Riyadh
Saudi Arabia is in full swing this week in its effort to wow Wall Street and the rest of the financial world as Crown Prince Mohammed bin Salman hits the midpoint of his Vision 2030 plan to transform the economy.
Some 7,000 movers and shakers are pouring into Riyadh for the Future Investment Initiative conference that takes place annually at the opulent Ritz Carlton hotel and in the vast halls of the adjacent King Abdul Aziz International Conference Center.
Getting a jump on the confab in Riyadh, the developers of Saudi Arabia’s trillion-dollar-plus Neom project invited a select group of financiers, celebrities and influencers to a kickoff event over the weekend at Sindalah Island, five kilometers off the kingdom’s west coast, Bloomberg reports.
The Red Sea resort island, where an ecosystem is rising of super-luxury hotels, swank night clubs and an 86-berth yacht marina, hosted a beach party headlined by Grammy Award winner Alicia Keys. She sang to an audience that included actor Will Smith, tennis champ Rafael Nidal and former NFL quarterback Tom Brady.
Back in the capital, FII opens on Tuesday with a bevy of investment bankers, hedge fund founders and corporate titans who have become regulars at the conference that was originally billed as “Davos in the Desert,” to highlight its aspirations for global influence.
Among the speakers slated for the main stage are Larry Fink, Chairman and CEO of BlackRock; Ben Horowitz, co-founder of Andreesen Horowitz, Jane Fraser, CEO of Citi; Ken Griffin, Founder and CEO of Citadel; Dame Julia Hoggett, CEO of the London Stock Exchange; Ruth Porat, President and Chief Investment Officer of Alphabet and Google; and David Rubenstein, Co-Founder and Co-Chairman of The Carlyle Group.
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The three-day event will be introduced by Yasir Al-Rumayyan, who is Governor of the Saudi Public Investment Fund and Chairman of Aramco. Richard Attias, CEO of the FII Institute, said at a press conference that he expects some $28 billion in business deals to be announced during the course of the conference.
Neom faces 20% budget cut amid continued drop in Saudi oil prices
Neom, the flagship mega-project of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 economic roadmap, is facing budget cuts.
The development along the Red Sea coast is expected to be allocated 20% less than its targeted budget for this year, Bloomberg reports.
The revision comes as the kingdom reconciles lower-than-expected oil prices and foreign investment that has it on track for at least three more years of projected national budget deficits.
Saudi Finance Minister Mohammed Al-Jadaan has previously said the eight-year-old Vision 2030 plan may face delays because the kingdom needs to be careful about “overheating” the economy – which may cause inflation to rise.
“If you don’t allow your economy to catch up with your projects, basically what will happen is you’ll import a lot more,” Al-Jadaan said at the Qatar Economic Forum in May.
As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans. “So giving it more time is actually wise,” he said.
Modifying the vision is not necessarily a bad sign, analysts told Bloomberg, echoing the Finance Minister’s comments. The “rightsizing” of projects is a sign the kingdom is maturing, according to Goldman Sachs’ MENA Economist, Farouk Soussa.
“What they’re doing in terms of adjusting these projects gives us a lot of comfort,” Soussa said. “They’re basically saying they’re not going to go for broke or bet the house on any one particular thing. If it’s possible, they’ll do it. If not, they won’t. They’re being quite sensible.”
Riyadh among top 15 fastest-growing cities over next 10 years
Even as the most audacious blueprints for Saudi Crown Prince Mohammed Bin Salman’s Vision 2030 are revised, Riyadh is still poised to be one of the fastest-growing cities in the world over the next decade as the kingdom’s mega-projects take root, according to British property consultancy Savills.
Saudi Arabia’s capital city landed in the top 15 fastest-growing cities by 2033 — the only urban center outside of Asia on the list — according to the Savills Growth Hubs Index.
Indian and Chinese cities take five spots each in the top 15, followed by Vietnam with two, and the Philippines, Bangladesh and Saudi Arabia with one each. The ranking is a compilation of forecasts of population, wealth and economic expansion.
Riyadh is at the center of the kingdom’s diversification push away from oil as the city serves as regional headquarters to an influx of international companies.
Major new developments are also underway to improve livability. The mixed-use property development New Murabba and a new metro system are under construction as the city prepares to host the World Expo in 2030 and vies for the World Cup in 2034.
The Middle East’s third largest city is expected to record a 26% uptick in population, taking Riyadh from 5.9 million to 9.2 million residents in 10 years. The new-arrivals boom is expected to result in continued government spending on massive infrastructure projects as well as improved amenities and services to accommodate the growing population, according to Savills.
“Saudi Arabia boasts a population of around 36 million people and, astonishingly, 67% are under the age of 35,” Richard Paul, Head of Professional Services & Consultancy Middle East, said in the report.
“The employment potential and ultimate spending power of this segment of the population over the next decade are enormous.”
Saudi Arabia on track to become world’s biggest construction market
Saudi Arabia is on track to become the world’s largest construction market as the kingdom pours billions of dollars into new urban hubs and tourism destinations underpinning its economic diversification strategy, according to Knight Frank.
Since Vision 2030 was laid out eight years ago, the country has announced projects worth more than $1.25 trillion spanning residential properties in the capital Riyadh to far-flung mega-projects like Neom, the real estate consultancy group found.
The total construction output value is forecast to reach $181.5 billion by the end of 2028, up almost 30% from 2023 levels, the London-based firm said in a report published Monday.
The construction boom is down to Crown Prince Mohammed bin Salman’s mandate to transition the oil-dependent economy to become a magnet for skilled workers and foreign tourists.
“We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value,” said Mohamed Nabil, regional partner and head of project and development services for the Middle East and North Africa at Knight Frank.
Family offices mull diversification to guide their Gulf investments
Hundreds of investors gathered in Abu Dhabi on Thursday to discuss the future of family offices – a growing group that is steering an expanding pot of wealth to the region at a pivotal moment of economic transformation.
“Our mandate is to stay away from oil,” Abdulrahman Al Suwaidi, Managing Director of the UAE’s AS Investments, quipped on a panel at the Abu Dhabi Family Office Summit on Saadiyat Island.
Instead, the investors safeguarding the Gulf’s intergenerational wealth are looking to the diversification strategies in the region, such as Saudi Arabia’s Vision 2030 or the UAE’s “Future Economy” initiatives, to guide their investment decisions.
Al Suwaidi, who was previously the director of investments for the ruling family of Dubai’s family office, the Al Maktoums’ Dubai Holding, said his current fund is deploying capital in food security – they own a stake in the biggest halal poultry farm in the U.K. – as well as in green energy.
In a part of the world overrun by fund managers looking to drum up capital, Ali Raza, CIO of Saudi Arabia Holding Co., said a key missing piece is how to effectively navigate the market.
“This goes for any region in the world but this is really the gap here,” Raza said.
Echoing Al Suwaidi, he implored would-be fundraisers to look to the economic transformation strategies in the countries where they are deal-hunting to identify opportunity.
Raza’s fund is deploying capital into electric vehicles and future mobility as well as semiconductors and data centers, he said. “Think very literally about Vision 2030,” he advised.
Family offices in the Middle East have grown rapidly in recent years, with total assets under management forecasted to hit a half trillion dollars in 2025, according to an analysis by Forbes.
Some 45% of family offices in the region are managing a portfolio worth $251 million to $500 million, with another 32% presiding over $2.1 billion to $5 billion.
Although slightly ahead of their Asian counterparts, the concept of family offices remains relatively new in the region, with less than half operating for more than a decade, Forbes found.
By comparison, roughly two-thirds of U.S. and U.K. family offices have been around for more than 10 years.
