Transforming Assets into Revenue

Transforming Assets into Revenue A Route to Fiscal Sustainability

Contents Understanding the Challenge of Public Asset Strains From Asset Ownership to Optimization as a Shift in Mindset Introducing Strategic Commercialization as a Solution Case Studies from the Saudi Context Rethinking Public Assets for Long-Term Impact How APEX Advisory Can Help? Contents

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Understanding the Challenge of Public Asset Strains

Reliance On Government Budget Dependence on public funding limits flexibility and strains fiscal resources.

In today’s fast changing world, government entities face growing pressure in identifying, funding, developing, and maintaining assets as part of their public service and projects delivery mission. This pressure is amplified by mounting fiscal constraints, global public debt is projected to rise by 2.8 percentage points in 2025, pushing debt levels above 95% of GDP, with expectations of nearing 100% by the end of the decade 1 . Such mounting debt burdens limit fiscal flexibility, compelling governments to explore alternative models. While public organizations often own vast and valuable physical, digital, and intangible assets, from transport hubs and government buildings to public spaces, data, and infrastructure, many of these remain underutilized, detached from broader development strategies, or simply seen as cost centers rather than potential value driver. Asset delivery and management present persistent challenges for the public sector across many economies. These challenges become even more pronounced in countries undergoing large-scale reform and transformation such as Saudi Arabia, where Vision 2030 is reshaping the national landscape by reducing reliance on oil and steering toward a more diversified, sustainable economy.

Service Gaps Inconsistent service delivery reduces satisfaction and limits impact.

Understanding the Challenge of Public Asset Strains

Strategy & Execution Disconnect Misalignment between strategy and implementation hinders execution and limits long-term impact. Governance & Innovation Barriers Strict oversight and regulatory complexity constrain innovation in technology, delivery models, and partnerships. Institutional Constraints Restricted autonomy affects agility and delays decision-making. Bureaucracy & Time Constraints Prolonged and complex procedures delay execution and lead to outdated strategies that fall behind fast- changing market conditions.

These issues go beyond mere operational challenges; they pose a significant risk of missed opportunities.

1) Rising Global Debt Requires Countries to Put Their Fiscal House in Order, International Monetary Fund. April 2025. https://www.imf.org

From Asset Ownership to Optimization as a Shift in Mindset

This model assumes that government entities retain full ownership, provide primary funding, and manage risks throughout the asset’s lifecycle. While this approach has enabled vital infrastructure delivery, it places ongoing fiscal and operational demands on the public sector. Long-term value creation and alternative financing options are often underutilized, leading to increased interest in more flexible, partnership driven models aligned with national development goals. In recent times, governments have been urged to take a more strategic approach in managing resources to create both economic and social impact.

From Asset Ownership to Optimization as a Shift in Mindset

• Urban growth This shift was driven by:

• Fiscal sustainability efforts • Advanced data and digitization

Then

Now

Passive Ownership

Strategic Activation

Budget Reliant

Additional Revevue Generation Mixed Asset Thinking (Real Esteat, AIP, Data) PPP - Public Private Partnerships

Infrastructure Development Focused

Government Procurement

Traditionally, asset management in governments and large institutions has been approached with a limited focus on maintenance, compliance, and keeping services running smoothly. These assets were treated as static necessities, financed through annual budgets and managed to preserve continuity, not to create value.

This mindset shift opened the door to innovative approaches, and we can say that focus has changed from what do we own? to how can we create value from what we own?

Traditional Asset Delivery Framework

“…focus has changed from what do we own to how can we create value from what we own...?”

Identification & Planning

Budget Allocation & Approval

Design & Technical Scoping

Procurement & Contracting

Construction / Asset Delivery

Public Use & Maintenance

Introducing Strategic Commercialization as a Solution

“Commercialization is not a one-size-fits-all approach, it is about being fit for purpose.”

In the context of developmental projects, commercialization is perceived as an economic solution, and it refers to leveraging underutilized or high potential public assets to generate ancillary revenue streams through the design and implementation of non-core programs while maintaining high standards or public service delivery. Commercialization is a cross-functional solution that can be applied across sectors, asset types, and service delivery models. However, it is not a one-size-fits-all approach, a thorough assessment is essential to determine the optimal mix of offerings, guided by factors such as strategic objectives, targeted industry, asset characteristics, revenue potential, and other context-specific considerations.

Assets can take many forms whether physical, digital, experiential, or service-based each offering distinct opportunities for value creation.

Strategic & Structural Factors

Examples

Align with national strategies and the specific goals of the asset-owning entity. National & Entity Strategic Objectives

Factor in type, location, usage, and unique features of the asset. Asset & Project Characteristics

Transport

Airports

Public Transport

Roads & Highways

Value Creation Drivers

Infrastructure

Arenas & Stadia

Business District

Exhibitions & Events

Revenue Viability

Context Specific

Recreation

Museums

Parks

Shopping Malls

Highlight market demand, pricing potential, and financial sustainability.

Reflect governance, regulations, timing, or cultural fit.

Data

Institutional Knowledge

Master Developments

Theme Parks & Attractions

Market & Contextual Factors

Introducing Strategic Commercialization as a Solution

To approach this, organizations should look for structured, and sustainable commercialization strategies. Through the full asset commercialization lifecycle (pre – during – post) Asset Commercialization Lifecycle

Ancillary revenue is income generated from additional activities that complement the core mission of a public service or asset. Unlike direct fees or taxes, these revenues are often optional, value added, and based on market trend. Ancillary revenue streams can take many forms for example, those that leverage space, visibility, or user engagement

The 4 Stages of Delivering Asset Commercialization

During- Commercialization

Post- Commercialization

Pre-Commercialization

Commercial Operation Management

Examples

Strategic Identification

Commercial Assessment

Market Transaction

Exploring potential assets for commercialization

Designing commercial models and assessment

Activating opportunity through optimal tendering approach

Managing operations and performance to capture value

Telecoms & Wi-Fi

Sponsorships

OOH Advertising

Data Platforms

• Strategic alignment analysis • Assessment and baseline analysis • Initial feasibility study • Regulatory and institutional review

• Commercial strategy development • Financial analysis and valuation • Model structuring and packaging • Market testing • Private sector engagement strategy

• Investment tendering and negotiations • Bid management • Contracting, asset

• Commercial • Contractual management • Revenue tracking and compliance • Continuous improvement

operations oversight

Mobility Solutions

Retail

Smart Retail

Smart Poles

handover, and asset development

• Financial close

Naming Rights

Loyalty Program

VIP Membership

Smart Parking

...and many others, these opportunities are continuously evolving based on the nature of the asset, sector dynamics, and market trends.

By adopting commercialization strategies, government entities can shift their mindset from asset custodians to value creators, turning passive assets into platforms for revenue, innovation, and engagement.

Introducing Strategic Commercialization as a Solution

Global Practices in Asset Commercialization

Different business models are applied globally, ranging from fully public delivery to partnerships and private-sector-led operations, each with its own level of control, complexity, and risk sharing. Choosing the right model depends on industry type, asset characteristics, entity capabilities, and desired balance between public benefit and financial return.

In-House

Concessions

Long-term partnerships where the private sector finances, develops, and operates the asset while sharing risks and returns. Public-Private Partnerships

Leasing

Public entity develops and manages commercial activities directly using internal teams or government-owned subsidiaries.

A private entity is contracted to operate, manage, or develop the commercial asset under a service agreement or concession (often long-term).

Specific rights (e.g., naming, retail, data use) are licensed or leased to private partners in exchange for fixed or variable payments.

The public sector co-invests in a commercial asset with private partners through a special-purpose vehicle (SPV).

Description

Limited Private Sector Involvement

High Private Sector Involvement

Often used when commercial capacity exists or for sensitive/ strategic assets.

Common in transport, utilities, retail spaces, and public venues.

Large-scale infrastructure, and urban development.

Naming rights (e.g., metro stations), F&B concessions, telecom towers.

Real estate development, mixed- use assets.

Use Case

in 2024, which represents increase since the launch of vision 2030 1 515 billion 113%

Progress indicates that Saudi Arabia is making substantial strides toward its non-oil revenue goals, aligning with the Vision 2030 objectives. Non-Oil Revenue Focus

private sector contribution to the GDP 2 pro-business reforms identified, of which have been successfully implemented 3 in total projects value mega and giga projects across the kingdom 4 (e.g., NEOM, Qiddiya) +4.88 trillion +255 2016 40% 77% 517

2030 60%

The public asset commercialization model is gaining momentum globally as governments seek new ways to unlock value from its assets. In Saudi Arabia, the opportunity is especially timely. Vision 2030 emphasizes asset optimization, private sector participation, and diversified revenue streams, key areas where current indicators point to strong potential and strategic viability of such concept. Strategic Signals from Saudi

One the largest portfolios of projects globally across multiple sectors, designed to attract private investment, stimulate ancillary revenue, and position the Kingdom as a global destination. World-Class Mega and Giga Projects Kingdom efforts and initiatives have been focused on significantly expanding private sector involvement across strategic sectors, supported by investment facilitation measures. Private Sector Engagement Efforts

1) Non-Oil Exports Reach SAR515B in 2024, Saudi Press Agency. https://spa.gov.sa 2) Saudi Vision 2030 Document, Vision 2030. https://vision2030.gov.sa 3) About the Kingdom, Invest Saudi. https://investsaudi.sa 4) KSA Projects Overview, Big 5 Construct Saudi. https://big5constructsaudi.com

Case Studies from the Saudi Context

Riyadh Metro Commercial Strategy

The case studies below highlight how the Saudi government has leveraged its own assets to reduce operational costs and strategically enhance its long-term value. Public Transit Commercialization

40 8 +375M Projected Investment Initiatives Key Highlights

4B 10 Estimated for 4 main commercial programs

Naming rights of eight Riyadh Metro stations. year

Commercial Partners

In 2017, the Royal Commission for Riyadh City (RCRC), launched a commercial strategy to support the sustainability of the Riyadh Public Transit Network. This strategy aimed to reduce operational costs and generate non-fare revenue for reinvestment into the network’s long-term development. A key component of this strategy was the station naming rights program, complemented by other commercial opportunities such as telecom, retail space, advertising, and signage. Out of the 85 stations in the Riyadh Metro system, 15 were made available for naming rights, with 8 stations awarded to successful bidders through a structured pre-qualification and bidding process. The selection criteria ensured that participating companies aligned with Saudi values and culture. In November 2018, RCRC announced the results of the naming rights auction, awarding 10-year contracts for 8 stations to leading companies in KSA. These contracts collectively generated over SAR 1.045 billion in revenue, achieving one of the highest levels of long-term commercial revenue globally among public transport naming rights initiatives. This program reflects a broader trend of leveraging public assets to diversify revenue sources, while maintaining transparency and competitive access for the private sector.

Estimated on capital expenditures reduction by collaborating with public sector

As part of this transformation, APEX in partnership with RCRC played a pivotal role in the full commercialization lifecycle, by guiding the development and execution of a forward-looking commercial strategy, from strategic identification to commercial operations management. APEX Impact

Case Studies from the Saudi Context

ROSHN Waterfront

Recreational Development Commercialization

Key Highlights

25M 10Y Several Rights Contract Value Contract Duration • Retail Spot • Events Area • 2 Landmarks/Signs Locations • 5 ATM Locations • 21 Billboards (Screens - Digital Billboards Mupi) • 75 Outdoor Flags

In 2022, Jeddah Municipality launched an opportunity for the naming and sponsorship rights of the Jeddah Waterfront, an urban and recreational landmark along the Red Sea. The objective of the initiative was to attract private sector investment in the asset through a 10-year commercial agreement that would both generate alternative revenue streams and reduce the financial burden of long-term maintenance and operations on the public sector. The contract was awarded to Rotana Media Services, a regional entertainment and media company. The agreement granted Rotana various commercial rights, across designated parts of the waterfront. As part of the opportunity Rotana was allowed to transfer the naming rights with municipal approval. In mid-2022, the site was rebranded as Roshn Waterfront through a commercial agreement with Roshn Real Estate. This model reflects a growing shift toward transforming public assets into sustainable, revenue- generating opportunities through public-private collaboration without compromising public benefit or access.

APEX Impact

As part of this initiative, APEX partnered with the Municipality to shape and position the opportunity for market success, delivering strategic expertise in planning, design, and the early-stage execution of the commercialization process.

Rethinking Public Assets for Long-Term Impact

In conclusion, public asset commercialization presents a timely and strategic response to the growing fiscal and operational pressures facing government entities today. It goes beyond generating revenue, it is about building a smarter, more resilient public sector that embraces innovation, fosters meaningful private sector collaboration, and creates improved experiences for citizens and visitors alike. Saudi Arabia is already making progress in this space. Examples such as the Riyadh Metro and Jeddah Waterfront illustrate how commercial rights, when well-managed, can attract private sector investment, enhance public infrastructure, and reduce pressure on government budgets. These initiatives are not just financial wins they signal a broader mindset shift toward strategic asset management. Looking ahead, delivering impact will require the adoption of fit-for- purpose structured frameworks and leveraging proven global models, public entities can redefine the role of their assets, shifting them from passive infrastructure to active drivers of national progress and prosperity.

How Can APEX Advisory Help?

We offer a comprehensive range of Strategic Advisory services designed to empower our clients with actionable insights and tailored strategies that drive sustainable growth and long-term success. Strategic Advisory

APEX brings deep expertise and a proven track record, driven by a team of seasoned professionals to strategically support our client to deliver impactful solutions. How Can APEX Advisory Help?

We specialize in providing end-to-end solutions for revenue optimization, designed to turn ambitious visions into reality through expert execution and strategic guidance. Commercialization & Revenue Optimization

We implement the directions and vision of leadership, and work to monitor the results and enable institutions to succeed, through a selected group of services. Governance & Operational Excellence

Hekmat Dahabi Partner hekmat@apexadvisoryme.com Sayed Shah Partner sayed@apexadvisoryme.com Partners

Contributors Mohamed Kandil Associate Partner mohamed.kandil@apexadvisoryme.com Noura Al Ashaikh Senior Consultant noura.alashaikh@apexadvisoryme.com

Disclaimer This whitepaper is provided for informational and strategic guidance purposes only. The views and analysis expressed herein are those of the authors and do not necessarily reflect the official position of APEX Advisory or its affiliated entities. While efforts have been made to ensure the accuracy and relevance of the information, APEX makes no warranties, express or implied, regarding the completeness, timeliness, or accuracy of the content. Any examples, case studies, or references to specific initiatives, including those involving public or private sector entities, are presented for illustrative purposes only. They do not imply endorsement, ongoing collaboration, or guaranteed outcomes. Readers are advised to seek independent professional advice before making any decisions or taking any actions based on the content of this document. APEX disclaims any liability for any direct, indirect, or consequential loss or damage that may result from the use or reliance on this publication. © 2025 APEX Advisory. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form without prior written permission from APEX Advisory.

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