Saudi arabia real estate 2017 in review and forecasts middle east construction news gas up asheville

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Looking at the real estate market performance in 2017, the general trend for Saudi Arabia was that most sectors remained subdued on the back of a weak economic environment, with negative sentiment impacting activity levels and sale prices. Occupancy levels have been adversely impacted across most asset classes, leading to a gradual softening of rents. grade 9 electricity review While we see this current situation prevailing in the short term, we remain optimistic due to various government initiatives aiming to stimulate the real estate sector while encouraging the private sector to take a key role in this process. From a broader perspective, recently introduced strategic reforms aimed at creating a favourable environment for investment and strengthening the non-oil sector have placed a focus on real estate, which is forecast to double its contribution to economic output by 2020.

Non-oil sectors are expected to provide support to the overall economy, with non-oil GDP growth expected to ramp up to 3% in the medium term, ahead of overall GDP growth. electricity questions and answers physics Downside risks to future economic recovery mainly come from uncertainties about oil prices, regional tensions which remain high and the extent to which reforms will impact the economy.

This lacklustre performance can be mainly attributed to tightening market liquidity triggered by the fall in oil prices. electricity bill payment hyderabad This is further exacerbated by a combination of more inherent factors, namely the lack of affordability and limited access to finance, a supply shortage in the mid- to low end of the market, and the lack of suitability of the existing stock of residential units.

While we see current dynamics prevailing in the short term, we remain generally optimistic due to current government initiatives aimed at addressing key challenges which are restraining the growth of the residential sector in Saudi Arabia, including high land prices, supply shortages and affordability. Regulatory efforts such as the white land tax, the large housing schemes and the mortgage law display clear intent from the government to engage with the issues facing the residential market in the kingdom. gas up asheville While these efforts are only slowly filtering through, we see these initiatives as a step in the right direction for a more active real estate market over coming years.

Economic uncertainties continued to weigh on occupier expansion plans in 2017, particularly in Riyadh, where government entities remain a key occupier of office space. We expect weaker demand for office space in 2018 to continue exerting pressures on office rents. Vacancy rates should however maintain relative stability, as the supply pipeline is set to remain constrained in the short to medium term.

In fact, the Saudi Arabian market has been characterised by a lack of grade A space, with many occupiers owning their premises. gas definition As a result, occupancy in prime schemes is high. The prime office market in Riyadh has been dominated by a lack of supply in recent years, with key assets such as Kingdom Tower and Faisaliah Tower registering close to 100% occupancy. tropico 5 electricity In Jeddah, the supply-side dynamics for prime commercial office space are equally constrained.

Key to the development of the commercial office market are landmark mixed-use projects such as King Abdullah Financial District (KAFD) and the Jeddah Waterfront, which when complete will dramatically change the dynamics of the market by offering a best-in-class mixed-use product. However, due to current economic conditions, we remain wary of the prompt delivery of major projects, with further delays in completions expected.

More leisure-related initiatives indicate that steps are being taken to present the kingdom as a more leisure-friendly destination. By diversifying the demand profile of potential guests to the kingdom, sustained demand growth can be stimulated in the medium term, which will in turn create additional employment for the domestic market. Despite softening performance, opportunities for hospitality development remain in both locations, underpinned by the government’s long-term ambitions for the sector.