Riyadh – Fragmented efficiency and exercise ranges in Saudi Arabia’s actual property sector continued into the second quarter of the yr throughout the Kingdom’s areas.
Saudi Arabia’s workplace sector figures, visitation to the office stays above its pre-pandemic baseline and now sits 19.3% above the baseline. Exercise stays centered in the direction of Riyadh, the place demand continues to considerably outstrip provide. In consequence, occupancy ranges in Riyadh have risen during the last quarter by 0.7 proportion factors to succeed in 98.1% on common in Q2 2022. Constrained provide ranges have additionally continued to help progress in rental charges, the place within the yr to Q2 2022, common Grade A and Grade B rents elevated by 3.9% and 4.2% respectively. In Jeddah, with the Grade A section of the market being landlord favoured, common rents Grade A rents have elevated by 2.4% within the 12 months to June 2022. Within the Jap Province, Grade A rents in Dammam elevated by 2.9% over the identical interval, whereas in Khobar, common Grade A rents remained secure.
Residential transaction volumes in Saudi Arabia fell by 19.9% in Q2 2022, in comparison with a yr earlier, whereas the whole worth of transactions elevated by 21.4%. Throughout this era, the variety of residential transactions totalled 44,055 and the worth of transactions totalled SAR 36.0 billion. In Riyadh, within the yr to Q2 2022, the whole variety of transactions fell by 33.1% in comparison with a yr earlier. Transaction volumes in Jeddah fell by 6.2% within the 12 months to Q2 2022. The Dammam Metropolitan Space (DMA) additionally noticed its whole variety of residential transactions fall over this era by 3.4%. Nevertheless, in contrast to Riyadh and Jeddah, the DMA noticed its year-on-year year-to-June 2022 transaction volumes whole enhance by 0.7%. Common condominium costs, on a per sq. metre foundation, in Saudi Arabia have elevated by 6.2% within the yr to Q2 2022. Over this era, condominium costs in Khobar, Jeddah, Riyadh and Dammam elevated by 11.3%, 5.0%, 4.2% and 4.1% respectively. Except for Khobar, all main cities have registered a pointy decline within the annual charge of worth progress in Q2 2022, in comparison with the quarter earlier.
Saudi Arabia’s hospitality sector, the common occupancy charge within the yr to this point to June 2022 elevated by 19.0 proportion factors. Over the identical interval, the ADR elevated by 13.5%, and, RevPAR, on common, elevated by 72.8. Within the yr to this point to June 2022, in comparison with the identical interval in 2019, Saudi Arabia’s common occupancy sits 5.1 proportion factors decrease, regardless of its ADR rising by 2.6%, its RevPAR decreased by 6.0%. Riyadh and Medina are the one two markets which have exhibited improved efficiency ranges compared to 2019. With additional easing of restrictions on non secular tourism, we anticipate efficiency within the holy cities of Makkah and Medina to proceed to enhance throughout the the rest of 2022. As regards to enterprise and leisure visitation, we additionally anticipate efficiency to enhance, albeit not dramatically. We consider this slower charge of enchancment shall be underpinned by a lot of regional occasions scheduled outdoors of Saudi Arabia over the past quarter of 2022.
Taimur Khan, Head of Analysis – MENA at CBRE, feedback: “While Saudi Arabia’s financial system has gone from power to power lately, its actual property market efficiency stays fragmented on a metropolis and asset class stage. Given the dimensions of the change that the Kingdom is present process throughout all asset lessons, that is to be anticipated. Our long-term outlook on Saudi Arabia’s actual property sector stays optimistic, regardless of a few of the short-run challenges which sure market segments could also be going through.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 firm headquartered in Dallas, is the world’s largest industrial actual property companies and funding agency (primarily based on 2021 income). The corporate has greater than 105,000 workers (excluding Turner & Townsend workers) serving purchasers in additional than 100 international locations. CBRE serves a various vary of purchasers with an built-in suite of companies, together with amenities, transaction and challenge administration; property administration; funding administration; appraisal and valuation; property leasing; strategic consulting; property gross sales; mortgage companies and growth companies. Please go to our web site at www.cbre.com.
Mehdi Aliouat
Head of Advertising & Communications – MENA
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