With retail sales continuing to increase, this could be the first sector to recover in Riyadh real estate market, highlights JLL’s Q3 2017 market overview report. As the government launched the USD 2.6 billion entertainment company in September, Shoppertainment remains a key concept in the retail industry among entertainment, leisure and F&B tenants.
The growing participation by women in the workforce in Riyadh increased 1% quarter-on-quarter, to reach a total number of 397,000 currently employed. Furthermore, recent laws introduced to allow women to drive from 2018, will likely increase the spending power of women in Saudi, resulting in increased demand for retail space.
“The government’s agenda very much focuses on expanding the tourism and entertainment sector. As a result, government spending has increased in these areas, as shown by the launch of the entertainment company in September,” said Eng. Ibrahim Albuloushi, National Director and Country Head, JLL.
Market Development is to be subdued to increase growth in investment across all real estate sectors. In the list are two new REIT’s for Saudi Arabian stock market during Q3, bringing up the total REIT’s listed to six. A number of these REIT’s are currently seeking to acquire additional properties in Saudi Arabia, which will aid in boosting the real estate sector,” he added.
Thehotel sector remains heavily dependent on business tourism and travel, but the Kingdom aims to diversify the economy from its dependency on oil and on the business tourism sector to include leisure and entertainment. Expect that these economic ambitions to benefit the hospitality sector in the long-term.
The residential market has experienced further downward pressure in the rental sector as a result of continued expatriate departures. However, the affordable housing sector has witnessed positive activity as the result of the ongoing efforts by the Ministry of Housing to increase home ownership, in line with the National Transformation Program.
The office sector saw a modest decline in both occupancies and rentals. The market is most likely to witness further declines with the eventual introduction of the King Abdullah Financial District offering a significant amount of office space. Furthermore, private developers are reluctant to build additional office space given the current climate.