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Major project launches to stimulate Saudi Arabia’s realty market
February 12, 2019
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RIYADH: Increased government spending and progress on giga-project developments provide a catalyst for future investment opportunities in Saudi Arabia, outlines JLL’s 2018 Year in Review report.

With stronger oil revenues and progress on new social reforms, GDP growth levels are expected to register 2.4 per cent in 2018 according to Oxford Economics, up from -0.9 per cent in 2017. 2019 is expected to witness ongoing activity on the back of the Kingdom’s largest ever expansionary budget (SAR 1 trillion in spending), and commitment to driving economic growth in line with Vision 2030’s objectives.

“The government’s continued focus on strengthening the business environment and attracting foreign investment should have a positive impact on the real estate sector in the long run,” commented Dana Salbak, Associate, JLL Mena.

With conditions remaining soft across most sectors of the market in 2018, the hospitality and entertainment industries witnessed several major development announcements. These included the launch of Al Qiddiya in Riyadh and Amaala, the luxury wellness destination forming part of a giga-projects investment portfolio launched by The Public Investment Fund (PIF).

“These milestone projects are key drivers of Saudi Arabia’s non-oil economic growth and are expected to trigger other large scale real estate development activity. In addition, the wave of development across the Kingdom and other reforms promoting Saudization are expected to create a surge of job opportunities in the long run” Salbak added.

The entertainment sector saw the return of cinemas sparking development opportunities and significant retail opportunities in the field of ‘shoppertainment.’ While economic reforms have weighed on the purchasing power of residents, namely VAT, subsidy cuts and expatriate levy, the retail sector overall is set to benefit from the long term growth potential presented by reformative changes.

The inauguration of the King Salman Energy Park (Spark) in 2018 is another milestone project expected to fuel demand for commercial and industrial real estate in the Eastern Province. With an expected GDP contribution of SAR 22 billion by 2035 the park’s unique infrastructure is likely to act as a catalyst for attracting foreign investment and private sector participation.

projects

Saudi Arabia’s potential as a global transport hub has led to the development of major infrastructure projects focused on connecting cities, in turn providing private and foreign investment opportunities. 2018 saw significant progress with the inauguration of the 448km Al Haramain High Speed Railway and the soft opening of the new King Abdulaziz International Airport in Jeddah.

“The market dynamics in Saudi Arabia have seen a major shift in the last year, with significant government investment and new reforms expected to have a positive long term impact on the Kingdom’s real estate market,” said Thierry Delvaux, CEO, JLL MEA. JLL’s 2018 year in review report provides an overview of the KSA real estate’s market performance across the residential, office, retail and hotel sectors, in light of macro-economic factors and new government initiatives affecting the market’s future outlook.

JLL is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with nearly 300 corporate offices, operations in over 80 countries and a global workforce of 86,000 as of June 30, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. About JLL MEA Across the Middle East and Africa (MEA) JLL is a leading player in the real estate and hospitality services markets.

Indo-Asian News Service

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