The different areas of the property market in Saudi Arabia are developing in quite different directions and at very different rates. In the residential market, supply is attempting to catch up with demand. In the meantime, rents and land prices are rising quickly. Only the high-end/luxury market has areas of over-supply. In the commercial market segments of office, retail and industrial space there is a level of over-supply, though the extent of the issue is somewhat in dispute. At the same time the infrastructure segment is positively booming as it enjoys a high level of government focus.
The Saudi economy experienced a period of nervousness in 2009 but has rebounded strongly, led by government stimulus spending. While the economy is not dependent on government spending, the lift is clearly leveraging growth that is being seen across the board. We have revised our real GDP growth forecasts to 6.3% in 2011 and 4.0% for 2012.
Saudi Arabia’s population has quadrupled to 27mn over the past 40 years. 60% of the population is under 30. An estimated 1.65mn new residential units will be needed by 2015 to meet the growing demand. In March 2011, King Abdullah announced he would be investing in the construction of 500,000 homes.
The private ownership of residential property in Saudi Arabia has long been held back by inadequate property and mortgage laws. Currently less than 35% of Saudis own a home, and there has been a decadelong proposal to address the issue. The cause seemed lost in 2010 when the Shoura Council (the country’s non-elected parliament) shelved the proposal. Earlier in 2011 it was revived, amended and passed as a recommendation to the Cabinet and the King. If it is finally enacted, the new law should open the market to allow many more individuals to purchase their own home or villa. The mortgage penetration rate is presently estimated at just 2% in the state, much lower than 14% in neighbouring UAE and the 70% rate in the UK.
The commercial market has some over-supply, with more new property coming on to the market over the next two years. A relative pause in new developments, as the focus shifts towards infrastructure projects, will probably be a good thing. In the meantime we expect rents and yields to remain relatively stable. The extent of the supply/demand imbalance is debateable but it is certainly not serious enough to cause any major dislocation to the market.
Key Opportunities In The Real Estate Market:
?? Booming expenditure on infrastructure projects. Figures published by the National Commercial Bank show the government awarded SAR84.2bn (US$22.5bn) in contracts during H111, more than double the SAR33.0bn allocated in the same period of 2010.
?? The continuing demand for housing units creates business for construction companies, investors, property managers, real estate firms and lenders. The new mortgage law should, in time, increase the level of private ownership, but in any event the rental market will remain large and growing.
Key Risks To The Real Estate Market:
?? Changeable government policy. For several years the government emphasised the six ‘economic cities’ development. It has now switched to infrastructure and low-end housing, but may shift again.
?? The new mortgage law has not been enacted. Even after it is introduced some time will be needed to see if it is effective. Many potential lenders/investors in the mortgage business will want to see the law tested in court before committing funds. In any case the price of property makes it presently unaffordable for many Saudi workers.

[Studien Infos ausblenden]

Executive Summary 5
SWOT Analysis 7
Saudi Arabia Real Estate/Construction SWOT 7
Saudi Arabia Economic SWOT 8
Saudi Arabia Business Environment SWOT 8
Real Estate Market Overview 9
Real Estate Market Analysis 11
Table: Saudi Arabia’s Real Estate Market – Historic Rents, 2010 And 2011 (per m2/month, SAR) 11
Table: Saudi Arabia’s Real Estate Market – Net Yield, 2011 And 2012 (%) 12
Table: Saudi Arabia’s Real Estate Market – Terms Of Rental Contract/Lease, Mid-2011 12
Industry Forecast Scenario 13
Real Estate Outlook 13
Table: Saudi Arabia’s Real Estate Market – Rentals, 2011-2012 (per m2/month, SAR) 14
Table: Saudi Arabia’s Real Estate Market – Forecast Net Yield, 2008-2015 (%) 14
Construction And Infrastructure Outlook 15
Table: Saudi Arabia Construction And Infrastructure Industry Data, 2008-2015 15
Table: Saudi Arabia Construction And Infrastructure Industry Data, 2012-2020 16
Macroeconomic Outlook 19
Saudi Arabia – Economic Activity, 2008-2015 21
Business Environment 22
Saudi Arabia’s Business Environment 22
Table: BMI Business And Operation Risk Ratings 22
Table: BMI Legal Framework Rating 24
Table: Labour Force Quality 27
Table: Middle East And Africa – Annual FDI Inflows 28
Table: Trade And Investment Ratings 30
Table: Top Export Destinations, 2003-3009 31
Competitive Landscape 33
Company Profiles 34
Al Khodari Group 34
Almabani General Contractors 36
Arriyadh Development Company 38
DAMAC 39
Dar Al Arkan Real Estate Development Company 41
Jabal Omar Development Company 43
King Abdullah Economic City 45
Makkah Construction And Development Company 47
Saudi Oger 48
BMI Methodology 50
How We Generate Our Industry Forecasts 50
Construction Industry 51
Bank Lending 52
Sources 52
[Inhaltsverzeichnis ausblenden]