Real Estate
From The Report: Saudi Arabia 2015
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A young population and rising disposable incomes signal an optimistic future for the Saudi Arabian real estate sector. With the population growing at a rate of 2.6% per year, the need for housing is expanding rapidly, especially given that 67% of Saudis are under the age of 30. The retail segment also offers significant opportunities for developers, with vacancy rates at shopping centres in the capital standing at 8% in the second quarter of 2015 and rents growing by 7% to $773 per sq metre. The hospitality segment is meanwhile experiencing strong growth in line with the government’s aim to boost tourism. In Makkah, for example, 500 hotels are in the pipeline, adding significant capacity to the city’s current inventory of 125,000 rooms in 650 hotels.

Articles from this Chapter

Overview

Building across the board: An expanding population and a rise in tourism boost demand
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A young and growing population coupled with rising disposable income signals an optimistic future for the Saudi Arabian real estate sector and its developers. While the market, which has grown at a steady rate in recent years, seems poised for an uptick, a number of impediments related to land, financing and affordability remain, meaning that real estate firms have primarily been catering to a small segment of the population. Yet the dynamics of the market look set to change, with the government…

Analysis

Striking a balance: Programmes to support both developers and buyers
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The basic outline of the Saudi Arabian property market provides a tempting picture of a land of opportunity. The most populous country in the GCC region, the Kingdom has seen disposable income grow strongly. Furthermore, it has a youthful population and a culture that emphasises family formation, as well as the prospect of purchasing a first home. These factors present a rare combination in a region defined by majority-expatriate populations. Saudi Arabia is therefore beginning to stand out as…

Analysis

Finding finance: New trusts and funding vehicles offer solutions to property investment needs
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The opportunities for investors to place capital and for developers to access funding are expanding as Saudi Arabia’s real estate market grows and matures. Indeed, there is an increasing realisation that real estate in the Kingdom is a sound asset class and, consequently, more funds are beginning to eye the market as a means of generating steady returns. BREAKING INTO THE MARKET: Real estate investment trusts (REITs) and funds are a relatively new phenomenon in the Gulf region. The first…

Analysis

Shaping space: Rethinking the building model to meet housing demand
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Given the constricted land environment, development costs and affordability issues in Saudi Arabia, some real estate firms are beginning to rethink the building model in the Kingdom. Indeed, from developing with greater height and density to rolling out fully serviced and planned communities, the built environment across the country is beginning to change. RECONSIDERING THE VILLA: The Saudi market has traditionally been dominated by stand-alone villas, often developed individually by a family…