Business Monitor International


Saudi Arabia Real Estate Report

Published 27 February 2014

  • 75 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,295.00
Saudi Arabia Real Estate Report

BMI View: We believe that the real estate sector in Saudi Arabia will remain generally stable in 2014 with the potential for small growth of rental rates in Jeddah and a slight decrease for office rates in Riyadh. We believe that net yields will remain consistent, and that no significant change will come to this market while it is such a state of oversupply.

Saudi Arabia's various real estate sectors are developing in different directions and at varying rates. The commercial market in general suffers from oversupply and is forecast to undergo limited growth in the short term; our in-country sources and latest data collection do not contradict this long-held view in light of the dynamic supply pipeline. Of the three sub-sectors that we survey there are pockets of growth opportunity, particularly in the retail and industrial segment.

Recent Developments:

  • Riyadh, the capital and largest city of Saudi Arabia, recorded more than SAR99bn (US$26.40bn) in commercial and residential real estate transactions in 2013, making it the most sought-after city in the kingdom, according to the real estate index issued by the Ministry of Justice. The rise has been attributed to the positive impact of the economic and social stability witnessed in Saudi Arabia in 2013. The index registered more than 43,476 real estate transactions in Riyadh city covering a total area of 227m2. Jeddah came second with more than SAR50.6bn (US$13.49bn) in residential transactions and SAR39.9bn (US$10.64bn) in commercial transactions during the year.

  • A member of the real estate committee at the Eastern Province Chamber of Commerce and Industry in Saudi Arabia has said the province will attract real estate investments worth more than SAR100bn (US$26.66bn) in the next five years, reports Al-Riyadh daily. Abdullah Al-Sulaiman also noted that the Saudi real estate market is undergoing radical changes and needs modern approaches and non-traditional products to gain momentum.

Key BMI forecasts

Table of Contents

BMI Industry View
7
SWOT
8
Political
10
Economic
12
Business Environment
13
Industry Forecast
14
Office
15
Table: Office Forecast Rents (SAR a m2/month)
15
Table: Office Forecast Net Yield, 2011-2018 (%)
15
Retail
15
Table: Retail Forecast Rents (SAR per m2/month)
16
Table: Retail Forecast Net Yield, 2011-2018 (%)
16
Industrial
16
Table: Industrial Forecast Rents (SAR a m2/month)
16
Table: Industrial Forecast Net Yield, 2011-2018 (%)
17
Construction And Infrastructure Forecast Scenario
18
Table: Saudi Arabia Construction Data
18
Table: Saudi Arabia Construction Data
19
Labour View Plays Out As Growth Tempered
22
Project Awards Boost Medium-Term Expectations
24
Macroeconomic Forecasts
26
Table: Saudi Arabia - Economic Activity
36
Industry Risk Reward Ratings
37
Middle East And Africa Risk/Reward Ratings
37
Table: Middle East And Africa Real Estate Risk/Reward Ratings
37
Saudi Arabia Risk/Reward Ratings
37
Rewards
38
Risks
38
Market Overview
40
Office
44
Table: Terms Of Rental Contract/Lease - 2013
45
Table: Historic Rents - 2012-2013 (SAR a m2/month)
46
Table: Net Yield, 2012-2013 (%)
46
Retail
46
Table: Terms Of Rental Contract/Lease - 2013
47
Table: Historic Rents - 2012-2013 (SAR a m2/month)
48
Table: Net Yield, 2012-2013 (%)
48
Retail Sales Indicators
48
Table: Retail Sales Indicators, 2010-2017
48
Industrial
49
Table: Terms Of Rental Contract/Lease - 2013
51
Table: Historic Rents - 2012-2013 (SAR a m2/month)
51
Table: Net Yield, 2012-2013 (%)
51
Competitive Landscape
52
Company Profile
55
Al-Khodari Group
55
Almabani General Contractors
57
Arriyadh Development Company (ADCO)
59
DAMAC Holdings
61
Dar al-Arkan Real Estate Development Company
63
Makkah Construction And Development Company
65
Demographic Forecast
67
Demographic Outlook
67
Table: Saudi Arabia's Population By Age Group, 1990-2020 ('000)
68
Table: Saudi Arabia's Population By Age Group, 1990-2020 (% of total)
69
Table: Saudi Arabia's Key Population Ratios, 1990-2020
70
Table: Saudi Arabia's Rural And Urban Population, 1990-2020
70
Methodology
71
Industry Forecast Methodology
71
Sources
72
Risk/Reward Ratings Methodology
72
Table: Real Estate Risk/Reward Ratings Indicators
74
Table: Weighting Of Indicators
75

The Saudi Arabia Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Saudi Arabia Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Saudi Arabia.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Saudi Arabia to test other views - a key input for successful budgeting and strategic business planning in the Saudi real estate market.
  • Target business opportunities and risks in Saudi Arabia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

Executive Summary

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2017 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Ratings

BMI's Real Estate Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc