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In Saudi Arabia, Al-Mazaya Holdings
Weekly Real-Estate Report believes
Jeddah presents significant opportunities
to investors, on both the retail and
residential sides. We see strong
fundamentals that will likely push lease
values higher to the end of the year,
although we believe the same momentum
will not be enjoyed by commercial office
real estate, where the market is already
sufficiently well supplied to meet demand.
The vitality of a country’s retail sector
can significantly affect the fortunes of
its real estate sector. For example, in
the UAE, where retail performs strongly,
we see a beneficial effect upon the
real estate sector. Tourism, too, can
help the real estate sector, another
advantage the UAE has over other, less
touristically developed Gulf states. For
example, in 2015 it is forecast some
sixteen million people will visit the
UAE, an increase of 7.6 percent on
2014, generating revenues of AED67bn.
In order to keep pace with such growth,
the tourism industry must necessarily
invest heavily in the real estate sector,
generating real estate momentum.
Over the coming two years, we believe
we will see a 35 percent increase in
retail-related real estate in Jeddah,
and strong interest in tourism-related
real estate thanks to average 75
percent occupancy rates recorded
in 2015 in region’s existing hotels.
4
Mazaya Monthly Real Estate Report -
Week 1 - November 2015
Al-Mazaya Holdings Weekly Real-Estate
Report concludes by stating that we
expect to see Gulf governments put
considerable focus and emphasis on
the retail sector over the coming years
as a means of riding out fluctuations in
the global economy. Gulf countries have
rapidly growing populations capable
of supporting retail growth as well as
worldwide cache as retail destinations.
We believe that retail-related real estate
will perform strongly over the coming
half decade and more as a result of the
underlying strength of the retail sector.
We recommend that investors looking to
put money into Gulf real estate look to
developments that are related to either
tourism or to retail. Or, ideally, to both.