Ongoing investments in infrastructure and non oil industries expected to offset subdued nature of the market in the long term.
Despite delays in the delivery of office buildings in Q3 2018, there were two notable completions over the quarter bringing total office GLA to 1.05 million sq m. Further completions are expected over the last quarter, however we might see delays in the delivery of projects within the timeframe. Office rents weakened further as vacancy rates continued to increase.
There were no notable residential completions in Q3 2018, leaving the total supply relatively stable at 817,000 units. Due to delays in largescale community developments, the market will likely see a small number of residential completions in the final quarter of the year. Residential rents and sale prices remained under pressure in Q3 2018, reflecting current market conditions.
There were no new retail completions in Jeddah during Q3 2018, which saw rents and vacancy rates remain relatively stable over the quarter. Cinemas, F&B and entertainment options are becoming increasingly important features of shopping centres, and will play a greater role in shopping centre performance going forward.
Competition continued to increase in the hotel sector as two new hotels were handed over. Hotel occupancies declined marginally in the YT August 2018, while ADRs remained unchanged. Our long-term outlook for the hotel market remains positive due to growing developments in the entertainment sector.