Hello Smashi Business Readers!☀️

Donald Trump has been sworn in as the 47th President of the United States, making history as the first US president since the 19th century to win a second term after losing the White House. What does this mean for the world — and more specifically, for the thriving business landscape of the Middle East, particularly the two Gulf giants, Saudi Arabia and the UAE? One thing is certain: Trump’s mercurial personality is bound to bring surprises. Whether they will be good or bad remains to be seen!

Our stories for today are:

1. Dubai has allowed property owners on Sheikh Zayed Road and Al Jaddaf to convert their properties to freehold ownership.

2. Riyadh Air, Saudi Arabia’s new flagship airline, has postponed its launch to the third quarter of 2025.

3. And a deep dive into what Trump’s presidency means for Saudi Arabia and the UAE.

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Dubai's Property Ownership Game-Changer: Freehold Conversion on Sheikh Zayed Road and Al Jaddaf

📰 What is it about?

• Dubai has introduced an initiative allowing property owners on Sheikh Zayed Road (Trade Centre to Dubai Water Canal) and Al Jaddaf to convert their land ownership to freehold status. A total of 457 plots (128 on Sheikh Zayed Road and 329 in Al Jaddaf) are eligible for this conversion, significantly enhancing investment opportunities.

💡 Why it matters?

1. Boost for Dubai’s Real Estate Market

• Increased Market Value: Properties in these prime locations are expected to see higher valuations, benefiting current landowners.

• Global Investor Appeal: Freehold ownership allows investors to own the land permanently, making it a magnet for foreign investment.

2. Strategic Economic Growth

• Aligns with Vision 2033: The initiative supports Dubai’s Real Estate Sector Strategy 2033, aiming to:

  • Double the sector’s GDP contribution to Dh73 billion.

  • Grow real estate transactions by 70%.

  • Increase homeownership to 33% by 2033.

• Stimulates Demand: Adds significant freehold land in high-demand areas, particularly on Sheikh Zayed Road near financial and commercial hubs.

3. Key Investor Benefits

• Ownership Flexibility: Freehold owners can sell, lease, or modify their property without restrictions.

• Residency Incentives: Offers long-term residential visas for freehold property owners.

• High ROI Potential: Freehold properties in Dubai often yield 7-10% returns on investment.

🔜 What’s next?

• For Property Owners:

  • Eligibility Check: Use the Dubai REST app to confirm eligibility for freehold conversion.

  • Conversion Process:

    • Submit a land assessment and valuation application.

    • Pay a 30% conversion fee based on property valuation.

    • Receive a freehold ownership title deed.

  • Impact on Fees: Common area fees and service charges will follow Real Estate Regulatory Authority guidelines.

  For Dubai’s Economy:

  • Expanded Real Estate Market: Attracts international buyers and diversifies the investor base.

  • Infrastructure Development: Encourages high-value real estate projects tailored for freehold investors.

  For Investors:

  • Prime Opportunities: Sheikh Zayed Road and Al Jaddaf are now accessible to all nationalities, offering unparalleled locations.

  • Market Dynamics: Increased demand may drive up property prices, presenting both risks and rewards for investors.

Markets

Riyadh Air Delays Launch Due to Boeing Delivery Setbacks

📰 What is it about?

• Riyadh Air, Saudi Arabia’s new flagship airline, has postponed its launch to Q3 2025 due to delays in the delivery of Boeing 787 Dreamliners. Originally slated to start operations earlier this year, the airline now expects only four aircraftinstead of the planned eight.

💡 Why it matters?

1. Impact on Saudi Tourism Goals

• Tourism Target at Risk: Delayed operations could hinder Saudi Arabia’s goal of attracting 150 million annual visits as part of Vision 2030.

• Capacity Gap: Riyadh Air was created to expand the kingdom’s air traffic capacity and enhance traveller services.

2. Setback for Saudi’s Aviation Ambitions

• Key Routes Pending: Initial routes, expected to include major destinations like Dubai, Jeddah, Cairo, Istanbul, and Milan, remain unannounced.

• Competitive Landscape: The delay could give rival carriers like Emirates, Qatar Airways, and Etihad a continued advantage in the region.

3. Boeing’s Production Challenges

• Declining Deliveries: Boeing delivered 291 aircraft in the first three quarters of 2024, compared to 497 by Airbusduring the same period.

• Reputation Issues: Production setbacks and scrutiny following 737 Max crashes and other reliability concerns have impacted Boeing’s output and stock performance.

🔜 What’s next?

For Riyadh Air:

• Revised Strategy: CEO Tony Douglas remains optimistic about receiving deliveries this year but acknowledges ongoing risks.

• Operational Adjustments: The airline may focus on fewer routes or rely on leasing aircraft to meet its revised timeline.

For Saudi Tourism and Aviation:

• Short-term Alternatives: The kingdom may need to boost partnerships with existing carriers to maintain growth in tourist arrivals.

• Infrastructure Investment: Riyadh Air’s eventual launch remains central to Saudi Arabia’s strategy to compete with major Gulf carriers.

For Boeing:

• Pressure to Recover: The company must address production delays to meet commitments, as its main rival Airbus continues to outperform it in deliveries and market confidence.

• Potential Financial Strain: With shares trading at 50% below pre-2020 levels, Boeing’s recovery depends on restoring reliability and scaling up production.

Trump 2.0: What it Means for Middle East’s Two Superpowers

With Donald Trump returning to the White House for a second term, the dynamics between the United States, Saudi Arabia, and the UAE are poised for significant shifts. The interplay between Riyadh and Abu Dhabi—often competing for influence in the region and Washington—will shape their respective strategies under Trump’s presidency.

1. A Renewed US-Saudi Partnership

Saudi Arabia’s relationship with the US is set to deepen, with an eye on mutual goals like expanding the Abraham Accords. Bringing Saudi Arabia into normalized relations with Israel could redefine regional geopolitics. Trump's administration will likely prioritize this as a legacy achievement, with Saudi Arabia seeking tangible rewards, including:

• Economic Gains: Increased US-Saudi trade, investment in Vision 2030 giga-projects, and enhanced bilateral trade.

• Security Guarantees: Strengthening defense ties amidst regional threats from Iran and other actors.

However, constraints like lower oil revenues and a focus on domestic spending might temper Saudi Arabia’s ability to invest heavily in the US. This could lead to more cautious economic diplomacy despite the ambitious rhetoric.

2. UAE’s Balancing Act

For the UAE, Trump's return presents opportunities and challenges. Abu Dhabi’s transactional approach aligns well with Trump’s deal-making style, as evidenced by recent commitments like Damac Properties' $20 billion investment in US data centers. The UAE is well-positioned to:

• Leverage Tech Partnerships: Gain advanced US semiconductors and AI technologies amid stricter export controls to China.

• Expand Trade Opportunities: Capitalize on Trump’s pro-business policies while mitigating the impact of tariffs on energy and other exports.

However, the UAE’s "open door" foreign policy, including close ties with China and Russia, may face scrutiny under a Trump administration eager to counter Beijing's influence.

3. Rivalry for Influence

The competition between Saudi Arabia and the UAE for Washington’s attention will likely intensify:

• Saudi Arabia’s Upper Hand: As a larger regional power with a more ambitious Vision 2030 plan, Saudi Arabia holds greater geopolitical weight. The Abraham Accords' expansion could further consolidate this position.

• UAE’s Strategic Maneuvering: The UAE’s agility in striking deals and building relationships in Washington—alongside its established reputation in tech, real estate, and tourism—positions it as a formidable player.

4. Energy at the Core

Energy will remain central to US ties with both nations. Trump’s climate-skeptic stance and commitment to fossil fuels align with Gulf producers' interests, though his push for increased US production might counteract price gains.

• Saudi Arabia’s role as a global oil leader gives it leverage, but constrained production capacity and rising domestic investments limit flexibility.

• The UAE, with its diversified economy and strategic logistics capabilities, could better navigate disruptions caused by potential US tariffs and shifting trade flows.

5. What to Watch

• Abraham Accords Expansion: A litmus test for US-Saudi relations under Trump 2.0, with the UAE watching closely.

• Technology and Trade Dynamics: Both nations will seek to secure US support for tech advancements while avoiding pitfalls from protectionist policies.

• Rivalry for US Favor: Expect both powers to intensify lobbying efforts in Washington, with overlapping interests leading to moments of collaboration and competition.

In Trump’s second term, Saudi Arabia and the UAE will navigate a delicate balance of cooperation, rivalry, and adaptation, with each vying to shape their strategic partnership with the US to their advantage. The outcome will profoundly influence the region’s political and economic trajectory.

🔍In other news…

1. Riyadh-based real estate technology company Rize has successfully raised $35 million in a Series A funding round, led by Raed Ventures.

2. Snap CEO Evan Spiegel discussed this milestone during an interview in Riyadh on The Mo Show with Mohamed Islam.

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