How
The Saudi Arabia Real Estate Market Is Positioned?
The real estate market in Saudi Arabia is
currently at its
growth stage. The real estate market has been categorized into four
sub-categories which include residential real estate, office real estate,
retail real estate and hospitality real estate market.
The Real
Estate Market in Saudi Arabia was facing crisis due to the shortage of
housing spaces, lack of mortgage law and other factors. It was estimated that
Saudi Arabia needed at least 1.5 Million of housing units over the next few
years to stem the shortage in affordable housing. This led to government
reforms and the first mortgage law was implemented in 2012. The government also
launched initiatives to build ~ units of housing over the next few years. The
government introduced various schemes such as Vision 2030 for increasing the
foreign investment in the Saudi Real Estate Market. The main focus of
government in this was to increase the presence of affordable housing for the
Saudi people.
The market faced various challenges due
to fluctuation of oil prices as Saudi's GDP is highly dependent on oil. The
government has implemented various policies and initiatives in order to boost
other industries and to reduce the reliance on oil for GDP growth. In 2016,
Capital Market Authority of Saudi allowed formation of Real Estate Investment
Trade Funds (REITs) on the local stock exchange with the aim of increasing
increase real estate contribution to GDP from ~% to ~ %. Further, in 2016 the
Saudi Arabia government introduced 'White Land Tax" of ~% on undeveloped
urban land. The focus has been on increasing the real estate participation in
the GDP.
How
Is The Saudi Arabia Retail Real Estate Market Positioned?
Retail industry in Saudi Arabia, Kuwait,
Oman and the UAE is expected to increase at a CAGR of over ~% during 2019-2024.
The main factors affecting this growth will be rise in consumerism, favorable
demographics, increase of population, strong growth in tourism and increase in
per capita income. Saudi Arabia is the largest country in Middle East having a
population of ~ Million as of 2018, out of which one-third of the population
consists of expatriates. In 2018, there were ~ million online shoppers in Saudi
Arabia, with an additional ~ million users expected to be shopping online by
2022.
Middle Eastern consumers being more
demanding, educated, price-savvy and connected increasingly require memorable
shopping experiences, access to the latest products and expect brands to offer
curation, personalization and storytelling.
Saudi Arabia retail real estate industry is growing due to changes in
the new trends and opening up of economy to attract foreign investment. The
market was affected negatively due to the implementation of VAT however it is a
temporary issue and the future seems to be bright due to increase in the
consumer expenditure. The retail spending increased from SAR ~ billion in 2013
to SAR ~ billion in 2018 registering a CAGR of ~% during the period.
What
Are The Factors Affecting Retail Real Estate Sector In Saudi Arabia?
Population
of Saudi Arabia: The rise in population with a strong growth trajectory in
tourism and per capita income are the major reasons for the upward growth of
the retail sector in all the states.
Introduction
of VAT: Saudi Government implemented a VAT of ~%, in
2018. This has caused a shift in consumer behavior. This impacted negatively on
market as the consumers in Saudi are cost-conscious.
Retail Spending Trends: The rise
in per capita disposable income in the country has positively impacted an
individual’s expenditure on food and non-food products during the review
period. This has enhanced profit for a broad category of retailers ranging from
single store retail outlets to those located in malls.
The gross
leasable area in organized retail supply for Saudi Arabia (including cities
Riyadh, Jeddah, Dammam Metropolitan Area and Makkah) has escalated from ~
million square meters during 2013 to ~ million square meters in 2018 having a
growth of ~% during the period. Riyadh region witnessed the maximum growth in
area supply of ~% during the period; on the other hand Makkah region had the
least growth of ~% during the period. The supply of retail malls has grown over
the years due to the completion of various malls and community centers in the
major cities such as Malqa Center, Telal Center Riyadh
Park, Riyadh Gate, Sidra, The Dheyafah, Panorama
Mall, Al Qalam Mall and others. The retail space demand in Saudi Arabia is
having mix reaction to the changing retail scenario in Saudi Arabia. The total
retail space demand was about ~ million square meters in 2013 and it increased
to ~ million square meters in 2018, thus witnessing average growth of ~% over
the review period. Riyadh region witnessed the most growth during the review
period with average growth of ~% and least growth was witnessed in Makkah of
~%.
The
average overall occupancy has remained stable over the years between ~% - ~%
across Saudi Arabia. In 2013, the occupancy rate for retail spaces in Saudi
Arabia was estimated to be around ~% which decreased by ~ percentage point and
was valued at ~ % in 2018.
Key
Topics Covered in the Report
Real Estate Market Scenario in Saudi Arabia,
2013-2018
Overview of Retail in Saudi Arabia
Factors Inflecting Retail Real Estate Sector in
Saudi Arabia
Current and Future Retail Demand and Supply,
2013-2025F
Supply and Demand Gap, 2013-2025F
Saudi Arabia Retail Real Estate Market Regional
Landscape
Retail Market Outlook, Opportunities and Future
Development Trends
Saudi Arabia Retail Market Future Outlook
Saudi Arabia Key Upcoming Malls
Future Trends in Retail Market
Saudi Arabia Retail Market Success Factors
Recommendations
Saudi Arabia Retail Space Key Features and
Characteristics
Saudi Arabia Case Studies of Major Retail
Centers
Saudi Arabia Hotel Real Estate Market Overview
Factors Influencing Hotel Sector in Saudi Arabia
Saudi Arabia Current and Future Hotel Supply and
Demand, 2013-2025F
Supply and Demand Gap, 2013-2025F
Saudi Arabia Hotel Real Estate Market Regional
Landscape
Saudi Arabia Hotel Market Outlook, Opportunities
and Future Development Trends
Key Features and Characteristics of Hotels in
Saudi Arabia
Saudi Arabia Key Expected Hotel Projects
Saudi Arabia Hotel Market Potential Gaps
Saudi Arabia Recommendations Regarding Success
Factors of Developing Hotels
Saudi Arabia Case Study of Major Hotels
Saudi Arabia Office Real Estate Market Overview
Factors Influencing Office Sector in Saudi
Arabia
Saudi Arabia Current and Future Office Supply
and Demand, 2013-2025F
Supply and Demand Gap, 2013-2025F
Saudi Arabia Office Real Estate Market Regional
Landscape
Saudi Arabia Offices Key Features and
Characteristics
Saudi Arabia Key Expected Upcoming Office
Projects
Saudi Arabia Office Market Gap Analysis
Saudi Arabia Office Market Recommendations
Regarding Success
Saudi Arabia Office Market Future Outlook,
Opportunities and Development Trends
Saudi Arabia Co-Working Office Space Snapshot
Saudi Arabia Case Studies of Major Office
Complexes
Factors Influencing Residential Sector in Saudi
Arabia
Supply-Demand Gap, 2018
Saudi Arabia Residential Real Estate Market
Regional Landscape
Saudi Arabia Residential Real Estate Market Gap
Analysis
Saudi Arabia Recommendation Regarding Success
Factors of Developing Residential Market
Saudi Arabia Residential Market Future Outlook,
Opportunities and Development Trends
Saudi Arabia Key Upcoming Residential Projects
Key Features and Characteristics of Residential
Sector in Saudi Arabia
Existing Housing Typologies in Saudi Arabia
Saudi Arabia Construction Costs, 2018
Saudi Arabia Online Real Estate Market Snapshot
Saudi Arabia Real Estate Online Portals Business
Model
Saudi Arabia Online Real Estate Major Players (
Property Finder (Including JRD Group, Emerging Market Property Group (Bayut.SA)
and Aqarmap)
Saudi Arabia Real Estate Market Competition
Scenario
Saudi Arabia Real Estate Market Major Real
Estate Developers Profiles (Dar Alarkan Real Estate Development Co., Taiba
Investment Company, Jabal Omar Development Company, Kingdom Holding Company,
Makkah Construction and Development Co)
For more information on
the research report, refer to below link:
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Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249
