Saudi Arabia's Red Sea Global Mulls 2026 Public Market Offering
Key Points
- Red Sea Global, owned by Saudi Arabia's Public Investment Fund, is considering a public market offering by 2026, potentially through an initial public offering or a real estate investment trust.
- The company aims to prove occupancy and profitability in its hotels before going public, aligning with Saudi Arabia's Vision 2030 to boost tourism and create jobs.
- Amaala and the Red Sea Project are key components of Saudi Arabia's Vision 2030, expected to generate 120,000 jobs and attract global visitors by 2030.
Summary
Red Sea Global, fully owned by Saudi Arabia's Public Investment Fund, is exploring a public market offering as early as 2026. The company is considering options like an initial public offering or a real estate investment trust, aiming to establish a proven record of occupancy and profitability in its hotels before going public. As part of Saudi Arabia's Vision 2030, Red Sea Global's flagship projects, Amaala and the Red Sea Project, are expected to create significant employment opportunities and open the country to international tourism.
Red Sea Global, a company fully owned by Saudi Arabia’s Public Investment Fund, is exploring the possibility of a public market offering, with plans to launch as early as 2026.
The company is currently examining various options for a public market event, including an initial public offering or the establishment of a real estate investment trust (REIT), CEO of Red Sea Global, John Pagano, stated in an interview with Bloomberg.
Even as he did not provide specifics on advisers, banks, or valuation, Pagano said the company is currently holding preliminary discussions with banks and stakeholders.
He said the company plans to go public by 2026 or 2027, after the hotels have been in operation for around two years, with a proven record of occupancy, cash flow, and profitability. The priority for the company now is to create a revenue stream that supports its value.
Pagano said the concept of public real estate companies has mostly disappeared from a property markets standpoint on a global scale. Instead, real estate investment funds are becoming increasingly popular because of their tax efficiency and accessibility to a wider range of investors.
Flagship Projects for Saudi Arabia’s Vision 2030
Red Sea Global was formed by merging two state-controlled developers by the Saudi sovereign wealth fund in 2021, where Amaala was taken over by the Red Sea Development Company.
Formerly known as The Red Sea Development Company, Saudi Arabia’s flagship tourism project developer rebranded to Red Sea Global last year.
Speaking to Skift earlier, Pagano had called the Red Sea Project and Amaala, the flagship projects for Saudi Arabia’s Vision 2030. He said the developments would be instrumental in opening the country up to global visitors.
By 2030, the two projects are expected to create 120,000 jobs — 70,000 direct and 50,000 indirect.
Amaala is expected to span over 4,000 square kilometers and house 25 hotels and around 900 luxury residential villas, apartments, and estate homes upon its completion in 2027.
The first phase of development is anticipated to conclude in mid-2024 and offer over 1,300 hotel rooms across eight resorts.
During the Skift Global Forum East in Dubai last year, Nicholas King, the group chief development officer of Red Sea Global, had revealed that the first three hotels at the Red Sea Project would open in 2023, followed by the next 13 in 2024.
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