Business Monitor International


Saudi Arabia Real Estate Report

Published 17 December 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:   With governmental policies   facilitating   market access for international investors, the relatively high sector returns are increasingly attracting foreign investors. While the commercial real estate sector in the office and retail segments is characterised by oversupply, growing demand will help close this gap and help enable room for new projects.

The increasing opening of the Saudi Arabian market is likely to lead to growing investment flows into the country. While one of the largest markets in the region, it has remained largely undeveloped due to regulatory restrictions. Thus, the market provides ample business opportunities which are likely to be taken especially as the government is eager to move away from the high oil-dependence of the economy. This trend is likely to accelerate as oil prices continue to fall and foreign investors are granted increasing rights of ownership and financial incentives.

Weaning the country off its dependence on hydrocarbons exports should ultimately prove beneficial in terms of growth of new industries such as financial services and petrochemicals production. Indeed, forecast long-term demand for commercial and industrial space has started to attract increased interest from foreign developers and investors. 2014 saw several international firms, including the China-based  Shenhua Group and  China Communications Construction Company as well as India-based  Kalliyath Steel agree to collaborate with  Gammon Group to build a new industrial city in Jazan. The outlook for commercial rental rates and net yields over 2015 is therefore generally favourable across much of the market. However, heavy oversupply in some areas of the country, such as the capital, Riyadh, will remain a key concern for landlords, particularly with a strong pipeline of development activity anticipated over the coming months.

Recent Developments

  • In September 2014, a permanent committee in Saudi Arabia started investigating land...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
13
Business Environment
14
Industry Forecast
15
Office
16
Table: Forecast Office Rental Rates, 2014-2015 (USD per square metre per month)
16
Table: Forecast Office Net Yields, 2014-2015 (%)
17
Retail
17
Table: Forecast Retail Rental Rates, 2014-2015 (USD per sq m per month)
17
Table: Forecast Retail Net Yields, 2014-2015 (%)
18
Industrial
18
Table: Forecast Industrial Rental Rates, 2014-2015 (USD per sq m per month)
18
Table: Forecast Industrial Net Yields, 2014-2015 (%)
18
Construction And Infrastructure Forecast Scenario
19
Table: Construction And Infrastructure Industry Data (Saudi Arabia 2012-2017)
19
Table: Construction And Infrastructure Industry Data (Saudi Arabia 2018-2023)
20
Project Awards Boost Long-Term Expectations
25
Macroeconomic Forecasts
26
Economic Analysis
26
Table: BMI AND BLOOMBERG CONSENSUS* FORECASTS FOR BRENT, USD/BBL
29
Table: Economic Activity (Saudi Arabia 2009-2018)
32
Industry Risk Reward Ratings
33
Middle East And Africa - Risk/Reward Ratings
33
Table: Middle East And Africa Real Estate Risk/Reward Ratings
33
Saudi Arabia Risk/Reward Ratings
34
Rewards
34
Risks
34
Market Overview
36
Riyadh
39
Jeddah
39
Office
41
Table: Historical Rental Rates, 2012-2014 (USD per square metre per month)
42
Table: Historical Net Yields, 2012-2014 (%)
43
Table: Terms Of Rental Contract/Lease, 2013
43
Retail
43
Table: Historical Rental Rates, 2012-2014 (USD per square metre per month)
46
Table: Historical Net Yields, 2012-2014 (%)
46
Table: Terms Of Rental Contract/Lease, H213
47
Industrial
47
Table: Historical Rental Rates, 2012-2014 (USD per square metre per month)
49
Table: Historical Net Yields, 2012-2014 (%)
49
Table: Terms Of Rental Contract/Lease, H213
49
Competitive Landscape
50
Office
50
Industrial
51
Construction
51
Company Profile
53
Al-Khodari Group
53
Almabani General Contractors
55
Arriyadh Development Company (ADCO)
57
DAMAC Holdings
59
Dar al-Arkan Real Estate Development Company
61
Makkah Construction And Development Company
63
Demographic Forecast
65
Table: Saudi Arabia's Population By Age Group, 1990-2020 ('000)
66
Table: Saudi Arabia's Population By Age Group, 1990-2020 (% of total)
67
Table: Saudi Arabia's Key Population Ratios, 1990-2020
68
Table: Saudi Arabia's Rural And Urban Population, 1990-2020
68
Methodology
69
Industry Forecast Methodology
69
Sources
70
Risk/Reward Ratings Methodology
71
Table: Real Estate Risk/Reward Ratings Indicators
72
Table: Weighting Of Indicators
73

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

BMI Industry View

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-2018 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 Rankings

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

The rankings 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