Riyadh – Mubasher: Saudi Arabia’s government continuous spending on major projects, along with growing developments in the entertainment sector, is likely to stimulate demand in the real estate market across the kingdom, reducing its reliance on oil, according to JLL’s 2019 mid-year review report.
The report provided an overview of the Saudi real estate’s market performance in light of macro-economic factors and new government initiatives affecting the market’s future outlook.
Saudi economy grew by 1.6% during the first three months of 2019, compared to 1.3% in Q1-18, according to the data issued on Wednesday.
“With conditions remaining soft across most sectors of the market in the first half of 2019, the hospitality and entertainment industries witnessed a number of major development announcements,” the report highlighted.
These announcements included the revealing of Al Qiddiya’s master plan in Riyadh, aiming to cement the city’s position as the “Capital of Entertainment, Sports, and the Arts”, in addition to launching the Kingdom’s first art house “Cinema El Housh” in Jeddah, apart from religious tourism.
“These projects are expected to generate large opportunities for job creation and private sector participation in the economy, particularly in the hospitality sector, while also enhancing the quality of life of the local population,” Dana Salbak, Associate at JLL MENA, commented.
She added that this could positively affect the number of tourists arriving in the kingdom, boosting hotel performance levels.
The report pointed out that the office market remained under pressure across main cities in Saudi Arabia.
That said, in the medium-to-long term, corporate demand is expected to pick up as business conditions improve, owing to various new projects such as Riyadh’s 176.7 kilometres metro and Dammam’s King Salman Energy Park (SPARK).
However, the residential sector across Riyadh, Jeddah, Makkah and Dammam Metropolitan Area (DMA) continued to soften during Q2-19.
Various government initiatives are expected to stimulate demand in the long-run, especially those launched by the Saudi Ministry of Housing.