Saudi Real Estate Exchange: Concept, Developments, and Role of Hail Cement

The Real Estate Exchange in Saudi Arabia refers to a national electronic platform launched by the Ministry of Justice in November 2021. This exchange aims to enhance transparency and credibility in the real estate sector by documenting all sales, purchases, and mortgages electronically and providing immediate access to real estate transaction data to the public. The Real Estate Exchange differs from traditional financial exchanges (like Tadawul) in that it does not trade stocks or securities; instead, it focuses on the actual transactions of property ownership transfer and mortgage documentation. This modern organization enhances the business environment and facilitates accurate and transparent market price and growth rate knowledge for participants.

The Real Estate Exchange plays a dual operational and regulatory role: it manages electronic property ownership transfers between parties and coordinates with banks and financing institutions to regulate mortgage processes. The platform also provides real-time data on real estate transactions, creating a transparent and reliable record of price and demand indicators in the market. This initiative is expected to contribute to linking the real estate sector with financial markets in the future by providing accurate data for Real Estate Investment Trusts (REITs) and listed companies.

The launch of the Saudi Real Estate Exchange is closely linked to the goals of the Kingdom's Vision 2030 and its ambitious programs to develop the real estate sector and increase home ownership rates among citizens. With the acceleration of real estate activity and the growth of transactions and real estate financing in recent years, the need for a modern regulatory tool that facilitates transactions and reduces reliance on traditional paper-based procedures has emerged. The Real Estate Exchange fills this gap by digitizing sales, purchases, and mortgage processes and providing a central database for transactions.

This step serves the government's direction towards increasing transparency, improving the quality of statistical data, and stimulating the real estate business environment, positively impacting urban planning and housing policies. The Real Estate Exchange also helps citizens and investors access actual sales prices, supporting financing entities in risk assessment and determining appropriate financing levels. This digital transformation represents a qualitative leap in the Saudi real estate market, reflecting the Kingdom's commitment to developing a modern digital infrastructure that supports the national economy.

The Real Estate Exchange operates as a comprehensive electronic platform for managing and documenting real estate transactions. Upon completing a sale or ownership transfer, both parties register the transaction electronically through the platform, and the process is officially and immediately documented. The exchange also includes mortgage processes, integrating with banking systems to document mortgages and financing guarantees. All steps are conducted electronically, reducing human errors and shortening the time required to complete transactions.

One of the main advantages of the exchange is the provision of direct and updated data on real estate transactions, including prices, location, type of property, and transaction date. This data is publicly available, enhancing transparency and allowing for realistic market price assessments. The platform also contributes to protecting the rights of all parties by electronically documenting ownership and ensuring the integrity of documents. In the long term, the Real Estate Exchange is expected to support the development of accurate real estate indicators and provide fertile ground for further innovation in real estate financial products.

The Real Estate Exchange offers multiple benefits for both citizens and investors. For citizens, the platform ensures the acceleration and documentation of ownership transfer processes and provides access to actual sales prices in various neighborhoods and areas. This enables buyers or sellers to make decisions based on accurate data, away from informal estimates or traditional intermediaries.

Investors and real estate developers benefit from the reliable data provided by the platform to conduct accurate feasibility studies, estimate returns, and assess risks. The exchange also helps them monitor real estate market trends and identify the best areas for investment. On the other hand, lenders (banks and financing institutions) find in the exchange a reliable source for documenting mortgages and loan guarantees, reducing financing risks. Thus, the Real Estate Exchange contributes to increasing market efficiency and stimulating a more transparent and competitive business environment.

Recent official statistics indicate continued growth in the real estate sector in the Kingdom of Saudi Arabia during 2024 and 2025. Home ownership rates among citizens rose to over 60% in 2020, with expectations to exceed 65-70% by mid-2025, supported by subsidized financing programs like "Sakani." The sector is experiencing a significant influx of real estate financing, with millions of citizens using electronic platforms to complete and document transactions.

On the project front, the Saudi government announced plans to add over 500,000 housing units during the period 2023–2025. Additionally, the number of real estate transactions recorded through the new Real Estate Exchange has increased, facilitated by electronic procedures. Despite some challenges related to inflation and rising global interest rates, the Saudi real estate market has shown adaptability, driven by government policies and extensive urban planning. These indicators reflect the vitality of the real estate sector and expectations for continued growth, especially with the entry of new players and the development of financing and digital products.

Hail Cement Company stock (symbol: 3001) is one of the important indicators of the health of the construction sector in Saudi Arabia, due to its pivotal role in supplying cement for housing and infrastructure projects. During 2024, the price of Hail Cement stock ranged between 35 and 42 Saudi Riyals, with a market capitalization estimated at around 3.3 to 4 billion Riyals, depending on stock price fluctuations and the number of issued shares.

In terms of profitability, the company's price-to-earnings (P/E) ratio stood at moderate levels ranging from 12 to 14 times, reflecting the relative stability of revenues in the cement sector. As for cash distributions, the company has maintained distributions ranging from 6 to 8% annually of the stock price, equivalent to approximately 2.4 to 3 Riyals per share. These indicators suggest the company's commitment to achieving stable returns for shareholders.

Hail Cement serves housing and real estate development projects in northern Saudi Arabia and other areas, and its sales are directly affected by activity in the real estate sector. Therefore, the performance of the company's stock reflects demand trends in the real estate and infrastructure markets and serves as a model for industrial companies linked to the economic cycle of real estate.

The Saudi cement sector includes several major national companies, such as Eastern Cement (3009), Yamama Cement (3000), Southern Cement (3050), along with Hail Cement (3001) and other companies. These companies are distributed across the Kingdom to meet the increasing local demand, especially in light of major projects like NEOM and Qiddiya.

Competition among companies revolves around product quality, operational efficiency, and cost reduction. Companies are also affected by fluctuations in energy prices, as the government subsidizes part of fuel costs, helping stabilize prices. Challenges facing the sector include controlling carbon emissions and improving environmental sustainability, along with competition from imported plants during certain periods.

Despite these challenges, the cement sector remains one of the pillars supporting urban development, with opportunities for growth amid urban expansion and increasing demand for building materials. The success of companies in this sector depends on their ability to adapt to market changes and invest in improving efficiency and modern technologies.

Although the Real Estate Exchange does not allow for direct stock trading, the data it provides indirectly impacts the stock market, particularly the stocks of real estate development companies and Real Estate Investment Trusts (REITs). With increased transparency and the availability of accurate data on transactions and prices, the valuation of listed companies becomes more realistic, which reflects on the performance of real estate stock indices such as the QEREA index.

REITs, of which there are more than 15 listed funds in 2024, benefit from real estate market data in determining investment strategies and assessing risks. The Real Estate Exchange also helps improve the quality of information available to investors and enhances confidence in the market. In the long term, technological integrations between the systems may link the Real Estate Exchange with financial trading platforms, opening the door to innovative real estate financial products.

Monetary policies, particularly interest rates, play a significant role in determining the level of real estate activity in Saudi Arabia. When interest rates rise, the cost of real estate financing increases, reducing the demand for property purchases and decreasing the number of transactions recorded through the Real Estate Exchange. Conversely, when interest rates fall, demand for real estate improves, positively impacting building material companies like Hail Cement.

The cement sector is directly affected by this dynamic, as the demand for its products is linked to construction activity. Therefore, cement companies closely monitor developments in monetary policies and seek to adapt to changes by improving efficiency and reducing costs. Strategically, the flexibility of companies in facing these changes remains a crucial factor in maintaining profitability and sustainability.

The Saudi real estate sector has witnessed a series of significant developments between 2023 and 2025. The Real Estate Exchange continued its expansion, linking real estate databases with the electronic systems of banks and financing institutions, facilitating financing and mortgage processes. Additionally, technological events such as the "ReStatix" exhibition focused on integrating artificial intelligence and big data applications into the real estate market.

On the company front, some major real estate development companies, such as Dar Al Arkan, launched new expansion strategies, and affordable housing projects increased. The cement sector recorded a production growth of about 7% in 2024, supported by new government projects. For Hail Cement Company, sales in the first quarter of 2024 increased by more than 10% compared to the previous year, with plans to increase production capacity and improve efficiency. These developments reflect the dynamism of the market and the continued government support for the sector.

Despite the notable growth in the real estate sector, the Saudi market faces several future challenges. Among the most prominent are the impact of global inflation and rising interest rates, competition from foreign plants, and increasing environmental requirements to reduce carbon emissions. There is also a need to develop more financing and digital products to meet the aspirations of citizens and investors.

Conversely, significant growth opportunities are available, thanks to urban expansion and major government projects like NEOM. The digital transformation, led by platforms like the Real Estate Exchange, provides a more transparent and liquid environment, enhancing investor confidence. Cement companies, including Hail Cement, have the opportunity to leverage this momentum by improving efficiency and adopting environmentally friendly solutions, supporting the sustainability of the sector in the long term.

Digitization has brought about a radical transformation in the Saudi real estate market, with platforms like the Real Estate Exchange contributing to the acceleration and documentation of transactions and providing immediate and transparent data for citizens and investors. Modern technologies such as artificial intelligence and big data analytics have also improved evaluation processes and accurately identified investment opportunities.

On the other hand, digitization has facilitated real estate financing procedures, linking banks and financing institutions with government platforms, reducing transaction time and costs. There has also been an increased reliance on digital solutions in real estate marketing, offering virtual viewing services and electronic evaluations. This wave of innovation is expected to continue, with more smart applications and digital services entering the market, enhancing competitiveness and improving service quality.

Forecasts indicate continued growth in the Saudi real estate sector until 2025, driven by housing and infrastructure projects, the expansion of smart cities, and special economic zones. With rising home ownership rates and an improved financing environment, demand for building materials, including cement, is likely to increase, supporting companies like Hail Cement.

At the same time, global economic challenges, such as fluctuations in interest rates and inflation, will continue to influence the pace of growth. However, supportive government policies and rapid digital transformation provide a strong foundation to overcome these challenges. It is important for investors and those following the real estate market to keep up with developments and rely on reliable and updated data to make their financial decisions.