Happy Saturday and Ramadan Kareem to everyone!

Saudi Arabia’s Public Investment Fund (PIF) has banned PwC from advisory work for a year, a move that could reshape the kingdom’s consulting landscape. Meanwhile, Riyadh and Jeddah now lead the Gulf in rental yields, surpassing Dubai as housing demand surges. In global business, Starbucks CEO Brian Niccols is making big moves—expanding with 5,000 new stores while cutting 1,100 corporate jobs to streamline operations. These shifts highlight major transformations across industries, from real estate and consulting to global retail.

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Saudi Wealth Fund Suspends PwC from Advisory Work for a Year

📰 What is it about?

• Saudi Arabia’s Public Investment Fund (PIF) has banned PwC from advisory and consulting contracts until February 2026.

• The suspension applies to PwC’s consulting projects but does not affect its auditing services.

• No official reason was given for the decision, and both PIF and PwC declined to comment.

• PwC has over 2,000 employees in Saudi Arabia and operates across multiple cities, including Riyadh, Jeddah, and Al Khobar.

💡 Why it matters?

• The PIF is a major driver of Saudi Arabia’s Vision 2030, with over 100 portfolio companies handling massive projects like Neom and Diriyah.

• Consulting firms, including PwC, McKinsey, and BCG, have benefited significantly from Saudi Arabia’s rapid economic transformation.

• PwC’s Middle East revenue surged to $2.5 billion last year, making it the fastest-growing market for its UK branch.

• The global consulting industry is already facing headwinds, with firms reporting slower growth in markets like Australia and China.

🔜 What’s next?

• PwC’s regional revenue growth may be impacted, especially given its reliance on Saudi clients.

• Other consulting giants could seize this opportunity to strengthen their ties with PIF and its subsidiaries.

• The move raises questions about Saudi Arabia’s evolving relationship with international consulting firms.

• With Vision 2030 in full swing, demand for consulting services will remain high—PwC will need to strategize to regain its foothold.

Markets

Starbucks CEO Plans Middle East Expansion Amid U.S. Layoffs

📰 What is it about?

• In February 2025, Starbucks CEO Brian Niccol announced the company will open 500 new stores and create 5,000 jobs in the Middle East over the next five years at the World Government Summit 2025 in Dubai.

• The expansion aims to strengthen Starbucks’ presence in a rapidly growing region.

• Meanwhile, Starbucks revealed a major restructuring plan in the U.S., including laying off 1,100 corporate employees, to streamline operations and improve efficiency.

💡 Why it matters?

• The Middle East expansion signals Starbucks' focus on emerging markets as it faces challenges in its home market, including declining sales and increased competition.

• The company has been affected by consumer boycotts in the Middle East, stemming from its perceived ties to Israel amid ongoing conflicts in the region.

• The layoffs in the U.S. and the shift in focus to the Middle East raise questions about Starbucks’ global strategy and financial health, highlighting a balancing act between addressing domestic struggles and capitalizing on growth opportunities abroad.

🔜 What’s next?

• Starbucks will likely intensify its efforts to expand in the Middle East, focusing on emerging market growth in the region to drive revenue.

• The company’s global strategy will continue to be scrutinized as it navigates complex geopolitical issues, including its former CEO Howard Schultz’s past connections with pro-Israel entities and the ongoing consumer backlash in the Middle East.

• The effectiveness of Starbucks' dual strategy—streamlining U.S. operations while aggressively expanding in the Middle East—will shape its future in both markets.

Saudi Rental Yields Lead the Gulf Amid Surging Housing Demand

What is happening?

• Rental yields for one-bedroom apartments in West Riyadh (13.1%) and North Jeddah (11.3%) are now the highest in the Gulf, according to Sakan.

• Saudi Arabia’s housing demand is rising as more people move to the kingdom from overseas and relocate within the country.

• Rental prices grew by over 10% last year, though they remain lower than in the UAE and Qatar.

• The Saudi government is pushing homeownership through mortgage schemes as part of Vision 2030.

Why it matters:

• Saudi’s booming non-oil economy is fueling housing demand, particularly in Riyadh, which is emerging as a regional economic hub.

• Despite rental costs being lower than in Dubai, the gap is narrowing, making Saudi real estate more attractive for investors.

• The kingdom needs to build 115,000 new homes to keep pace with demand, per Knight Frank.

• Rising property prices (+8% in Riyadh last year) and high interest rates may be pricing out first-time buyers.

What’s next?

• Saudi Arabia’s real estate market is expected to remain hot, but affordability concerns may slow homeownership growth.

• Investors may continue flocking to rental properties as yields stay strong.

• The government’s push to hit 70% homeownership by 2030 will likely lead to new incentives and financing options.

• If rental costs keep rising, Saudi cities may start facing the same affordability challenges seen in other Gulf markets.

🔍In other news…

• UK company plans purchase of UAE car trade start-up Seez.

• Dubai’s Parkin proposes $77m dividend for second half of 2024, and variable parking fee to start from April.

• UAE fuel prices to dip in March.

• A great read for the weekend: “Dubai is not a bottomless pit of jobs, beachside villas and luxury lifestyles for UK media exiles,” writes AGBI Editor at Large Frank Kane in an opinion piece titled ‘Why the British media is suddenly obsessed with Dubai’.

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