- Advertising Aerospace Agriculture Animals/Pets Automotive Biotech Boating Business / economics Chemistry Cities and provinces Comics Computer hardware Computers Construction Countryside Culture and art
- Decoration Education Electronics Energy Engineering Environment and nature Family Finance Food and Beverages Forest and Wood Gardening Government Handicraft Homeland Insurance International
- Legal Leisure Lifestyle Logistics Manufacturing Marketing Media Medical Metal industry and Metallurgy Military Music and Entertainment Non-profit Paper industry Photography Politics Publishing
- Real estate Religion Retail Science Security Site News Social services Software Sport / leisure Sports Telecommunications Topstory Tourism Working life
Home » Releases » Engineering » Residential sector leads continued growth of Riyadh and Jeddah markets
Residential sector leads continued growth of Riyadh and Jeddah markets
Published: 01-Jun-2014 12:03 pm
Publisher: Jones Lang LaSalle
JLL, the world’s leading real estate investment and advisory firm, today has released its first quarter (Q1 2014) Riyadh and Jeddah Real Estate Overview reports that assess the latest trends in the office, residential, retail and hotel sectors of the market in Saudi Arabia’s two largest cities.
Commenting on the reports, Mr Jamil Ghaznawi, National Director and Country Head of KSA Offices of JLL, said, “We are witnessing strong demand for residential property and increased demand for commercial space from both the private and public sectors, which is being fuelled by continuing and new large infrastructure projects throughout the Kingdom. With the Saudi Arabian Monetary Agency (SAMA) issuing licences to allow leading banks to offer real estate financing, we expect improved access to home ownership in the Kingdom. Saudi banks increasing their lending to real estate end users will contribute to increased levels of credit and confidence in the Saudi residential market.”
Summary Highlights – Riyadh:
•According to data from the Ministry of Justice, Riyadh was the most active Saudi market in 2013 in terms of real estate transactions. Transactions with a total value of SR99bn ($26.5bn) were completed in 2013, exceeding the SR87bn ($23.2bn) transacted in 2012.
•More than 43,400 real estate transactions were recorded in Riyadh. While the majority of these were in the residential sector, contributing more than SR51 bn (USD13.6bn), there were a number of large commercial transactions concluded, with a total value of SR47 bn ($12.5bn).
•The Saudi Commission for Tourism and Antiquities (SCTA) has announced plans to expand the hospitality sector, with a further 35,000 hotel rooms planned across the Kingdom over the next 5 years. As part of this growth, Alesayi Group has announced a JV with Accor to develop 10 new hotels, including an additional 195-room Ibis property in Riyadh.
•The Arriyadh Development Authority (ADA) has released plans to transform the downtown area of Riyadh into an historical, administrative, economic and cultural centre.
•Hill International has been awarded a $6.6m one-year contract extension from the Public Pension Agency of Saudi Arabia to continue providing project management services in connection with development of the $7.8bn King Abdullah Financial District in Riyadh.
•Bechtel is currently working on an eight-month design period as part of the $22.5bn six-line Riyadh Metro network. The project was announced in July 2013 with Bechtel starting work in November.
•Office market. Rents for prime buildings have remained stable in recent months, while those in secondary buildings have declined marginally. This trend is likely to continue over the rest of 2014 with high levels of new supply increasing the overall market vacancy rate (currently around 20%) and exerting downward pressure on rents outside of a limited number of prime buildings.
•Residential market. Prices and rentals have continued to increase in most sectors of the Riyadh residential market over the past six months. Notable increases have been recorded in villa prices to the north of the city and in apartment prices to the east. Rental increases have generally been more modest, typically in the range of 1% – 3%.
•Retail market. The retail market has moved into the recovery stage of its cycle over the past six months, with rental growth being recorded in average rentals in both regional and community malls. Vacancies in retail malls remain relatively stable at around 12%.
•Hotel market. Occupancy levels have increased to 72% in the year to March 2014, their highest level since 2010, but this increase has been achieved at the expense of average room rates that have declined by around 10% since the same period of 2013. This has resulted in a small (4%) decline in average RevPAR levels.
Summary Highlights – Jeddah:
•Data from the Ministry of Justice shows real estate transactions in Jeddah totalled $24.2bn (SR90.5bn) in 2013, with more than 40,132 individual deals.
•After gaining government funding, construction work on the Jeddah metro project is expected to commence in 2015. This project includes four lines with a total of 72 stations. Work on the first phase of the planned Makkah metro network is expected to begin in 2016.
•In addition to the large new metro projects, Jeddah authorities will complete 13 infrastructure projects worth a total of $238.8m (SR895.6m) over the next 12 months, the majority of which are related to transport to ease congestion in the city. The largest of these projects involves $103.7m (SR389m) improvements to King Fahd Street.
•Jeddah Economic Company (JEC) has announced that the foundation work of Kingdom Tower in Jeddah is finished, clearing the way for construction work to begin on the site in Q2 2014.
•The new King Abdulaziz International Airport will be ready by the end of 2014, according to Prince Fahd bin Abdullah, president of the General Authority of Civil Aviation with completion already up to 60%.
•The Saudi Commission for Tourism and Antiquities (SCTA) has announced plans to expand the hospitality sector, with a further 35,000 hotel rooms planned across the Kingdom over the next five years. As part of this growth, Alesayi Group have announced a JV with Accor to develop 10 new hotels, including two additional Ibis properties in Jeddah (with a total of 500 rooms).
•Office market. Jeddah has the lowest vacancy levels of any major office market in MENA (at around 10%), reflecting the active demand for space from both the public and private sectors. This demand has resulted in rentals growing by around 10% for Grade A space over the past six months, with somewhat lower increases reported in secondary buildings.
•Residential market. Prices have continued to increase in the Jeddah residential market with apartments (13%) recording a greater increase than villas (11%) over Q1 2014. The western region remains the preferred residential location, recording the greatest increases in prices.
•Retail market. The Jeddah retail market has experienced modest growth in asking rents over the past six months (4.7%) as the market continues to benefit from relatively low levels of vacancy (around 7%).
Other releases of publisher
- 22.07.2015 07:31JLL appoints Head of Integrated Facilities Management for Middle East and North Africa
- 04.06.2015 08:59JLL Unveils RED, its Corporate Real Estate Data and Insights Platform
- 21.04.2015 10:37Hospitality Sector Best Performer in Stable Abu Dhabi Real Estate Market, According to JLL Q1 2015 Real Estate Market Overview
Search from category
Newest of the category
- 19.06.2017 14:23Yanbu Technical Institute joins hands with GE Oil & Gas to strengthen technical skills of Saudi youth
- 03.05.2017 09:47GE Healthcare Receives FDA Indication Approval for Visipaque™ (iodixanol) Injection for use with coronary CT angiography
- 12.04.2017 14:28GE & HEI Fire Up & Synchronize Second HA Gas Turbine at Bhikki Power Plant