Recent financial results revealed that Al Andalus Real Estate Company achieved a remarkable improvement in its financial performance during 2025, as its net losses decreased by 42.2% to reach SAR 18.27 million, compared to losses of SAR 31.6 million in the previous year, 2024. This decrease in losses reflects the success of the operational and investment strategies adopted by the company to adapt to the changes and challenges of the real estate market.
The main factors behind the decline in losses of Al Andalus Real Estate Company
The official statement issued by the company and published on the Saudi Stock Exchange (Tadawul) website explained that a number of fundamental factors contributed to this financial improvement. Foremost among these factors was a 9.4% increase in operating profit, primarily driven by a reduction in investment losses in some affiliated companies.
In this context, the remarkable improvement in the operational performance of West Jeddah Hospital Company (Dr. Sulaiman Al Habib Medical Hospital - Al Faiha in Jeddah), which was opened and began operating on March 31, 2024, stood out. Also, the decrease in losses of Al Jawhara Al Kubra Company, as a result of the high occupancy rates in “The Village Mall”, along with the growth in profits of Advanced Markets Company, contributed to supporting the company’s financial position.
In addition, the company benefited from a decrease in zakat expenses and the recognition of capital gains resulting from the divestment of a subsidiary, Andalus Benefits Company (Marwa Center). Conversely, the company faced challenges in the form of higher general and administrative expenses and an increase in the provision for expected credit losses. Despite a 1.5% decrease in gross profit compared to 2024 due to higher cost of revenues, particularly in the office sector, the net result was positive, with a reduction in net loss.
The journey of development and investment in the Saudi retail sector
The company is one of the leading real estate investment and development entities in Saudi Arabia. Since its inception, it has strategically focused on developing and operating major shopping centers, hospitality projects, and mixed-use developments. The company is listed on the Saudi Stock Exchange, becoming a key player in meeting the growing demand for retail and leisure spaces.
Historically, the company's name has been associated with high-quality projects that have become major shopping destinations, giving it a solid base of income-generating assets. Its strategic partnerships, such as entering the healthcare sector through major hospitals, are a smart move to diversify its revenue streams and reduce its reliance on traditional retail, which has positively impacted its recent financial results.
The economic impact and role of the real estate sector in the Kingdom's vision
This financial improvement carries significant implications both locally and regionally. The recovery of major real estate companies strengthens investor confidence in the Saudi financial market and underscores the resilience of the local economy and its ability to absorb changes. Furthermore, the diversification of real estate companies' investment portfolios into vital sectors such as healthcare aligns perfectly with the objectives of Saudi Vision 2030, which aims to diversify the economy.
The success of real estate developers in improving occupancy rates in major shopping centers reflects growth in the retail and entertainment sector, contributing to job creation and supporting GDP. In the long term, the company is expected to continue reaping the benefits of its new investments, potentially paving the way for a return to full profitability and strengthening its competitive position in the regional market.
