A public market offering may be possible for Red Sea Global, which is entirely controlled by Saudi Arabia’s Public Investment Fund and intends to begin operations as early as 2026.
According to Red Sea Global CEO John Pagano in an interview with Bloomberg, the business is now considering different possibilities for a public market event, such as an IPO or the creation of a real estate investment trust (REIT).
Pagano stated that the firm is now having early negotiations with banks and stakeholders, despite the fact that he did not disclose any information regarding advisors, banks, or valuation.
After the hotels have been open for around two years, with a track record of demonstrated occupancy, cash flow, and profitability, he said the business expects to go public by 2026 or 2027. The company’s top objective right now is to develop an income source that will sustain its worth.
According to Pagano, the idea of publicly traded real estate corporations has mostly vanished from the perspective of global real estate markets. Instead, because to their lower tax rates and accessibility to a larger variety of investors, real estate investment funds are growing in popularity.
Vision 2030 flagship projects for Saudi Arabia
In 2021, the Saudi sovereign wealth fund combined two state-controlled developers to create Red Sea Global, and Amaala was taken up by the Red Sea Development Company.
The Red Sea Development Company, a leading developer of tourism-related projects in Saudi Arabia, changed its name to Red Sea Global last year.
The Red Sea Project and Amaala are what Pagano, in a previous interview with Skift, referred to as the “flagship projects” for Saudi Arabia’s Vision 2030. He claimed that the new projects will be crucial to welcoming foreign tourists to the nation.
The two projects are anticipated to generate 120,000 employment by 2030, including 70,000 direct jobs and 50,000 indirect jobs.
Upon completion in 2027, Amaala is anticipated to cover an area of more than 4,000 square kilometres, have 25 hotels, and contain close to 900 luxurious villas, flats, and estate houses.
It is estimated that the first phase of construction would offer more than 1,300 hotel rooms spread over eight resorts by mid-2024.
The first three hotels at the Red Sea Project will open in 2023, followed by the remaining 13 in 2024, according to Nicholas King, group chief development officer of Red Sea Global, who made the announcement during the Skift Global Forum East in Dubai last year.
Source: skift