Jones Lang Lasalle report says real estate market to benefit from Saudi gov't spending package
Opportunities abound in Jeddah's real estate market with sale prices and rents set to continue to rise, Jones Lang Lasalle said in a new report published on Sunday.
The consultants said the Jeddah market was benefiting from the Saudi government's recently announced financial stimulus package and massive public sector infrastructure investments.
In its Jeddah City Profile, JLL said an additional 25 million sq m of land offered by the Jeddah Municipality for future large scale residential developments "will encourage market activity by mitigating one of the key barriers to development - the high cost of land".
Soraka Al-Khatib, co-head of Jones Lang LaSalle Saudi Arabia said: "Like the rest of Saudi Arabia, Jeddah is particularly well positioned to benefit from this massive flow of public capital into housing and infrastructure."
Over the past six months, JLL said the residential market in Jeddah had seen rents and sale price growth, which is expected to continue through 2011.
It said retail rents were set to remain "relatively stable" this year as new supply handovers in the retail market were increasing options for tenants and pushing owners to revise tenant mix and reposition retail asset.
JLL added that Jeddah's hotel market had witnessed a growth in performance over the past six months, even though occupancy marginally declined.
"Driven by rising investment in tourism infrastructure and development of the city's leisure offerings, long term prospects for Jeddah's hotel sector remain positive," the report said
In the short term, JLL said Jeddah's office sector will remain tenant favourable due to existing oversupply and rent declines.
"Over the next twelve months, supply handovers will push up vacancy across Jeddah and spark relocation demand by tenants seeking to update to higher quality properties in better locations," JLL added.