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Al Akaria profit falls 39% as Saudi home sales drop

By Pramod Kumar
The value of Saudi real estate transactions fell 11 percent during 2023 to SAR193 billion Unsplash.com
The value of Saudi real estate transactions fell 11 percent during 2023 to SAR193 billion

Saudi Real Estate Company (Al Akaria) said net profit fell 39 percent to SAR67.6 million ($18 million) in 2023.

Revenue fell 12 percent year on year to SAR1.8 billion due to a decline in the sale of units and land plots by SAR531 million, the Saudi-listed developer said in a statement. In addition, financing charges rose by SAR96 million due to a significant rise in interest rates.

Accumulated losses stood at SAR67 million last year, making 1.8 percent of the company’s capital.

The value of Saudi real estate transactions fell 11 percent during 2023 to SAR193 billion, but the number of construction material licenses awarded in the kingdom rose 39 percent in the same period, figures released by the Ministry of Justice in January showed.

Saudi Arabia is engaged in a massive economic development programme centred on giga-projects valued so far at $1.25 trillion, leading one real estate consultancy to describe the country as the world’s biggest ever construction site. 

The World Bank last week said that it expects Saudi GDP to grow by 4.1 percent in 2024 and 4.2 percent in 2025, rebounding from a 0.5 percent contraction in 2023 caused by Opec+ output cuts.

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