Ongoing mega-project announcements and improvements to government regulations are expected to boost demand for and enhance the long term performance of Riyadh’s real estate sector, according to new research.
JLL’s Q1 market overview said reforms focused on increasing transparency, enhancing the logistics sector and improving the overall quality of living for Riyadh’s citizens are expected to accelerate the implementation of Vision 2030.
Earlier this year, the government announced a SR86 billion ($23 billion) to revamp public spaces in Riyadh, aiming to improve the quality of life for the city’s residents.
The King Salman Park will promote urban development with green spaces and will include recreational areas for the benefit of the communities and citizens in Riyadh.
Along with government initiatives to boost home ownership, this is expected to promote demand for residential units in the long-run, JLL said.
The Ministry of Housing has also launched a rental price index aimed at enhancing market regulation and providing more transparency.
"This is expected to reflect positively on the housing sector as it could lead to an increase in the volume of transactions," added JLL.
Dana Salbak, associate, JLL MENA, said: "With market conditions continuing to soften in the first quarter of this year, large scale announcements aimed at stimulating economic growth are expected to boost sentiment and translate to increased demand for the capital’s real estate.
"Regulations such as introducing a rental price index are also a market stimulant, as they are expected to improve transparency in the residential sector, which could lead to larger transaction volumes.”
In Q1, demand for office space remained limited but is expected to rise in the long term as government initiatives encourage private sector participation in the economy, JLL noted, adding that there is a particular focus on SMEs, which will boost demand for smaller, flexible office usage.
In the hotel sector, it is expected that the growing demand for domestic tourism and the kingdom's continuous efforts to enhance the supporting infrastructure will positively reflect on Riyadh’s hotel performance.
JLL said the city's retail sector witnessed developers diversifying their offerings by introducing increased entertainment outlets, local fashion and home grown F&B outlets.
The overall rise in e-commerce across the region will see these developers offering digital experiences to customers through mobile browsing, online shopping and social media, it added.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.