Saudi powerhouse

KSA set to head the GCC region in real estate investment

A new report from Jones Lang LaSalle has earmarked the KSA as the region’s biggest real estate market, with a breadth of investment opportunities across residential, office and hotel sectors driven by a large and growing economy and extremely strong demographic fundamentals.

‘The Gulf’s Powerhouse – Saudi Arabia’s Real Estate Market’ is part of Jones Lang LaSalle’s ‘Global Foresight Series’ and highlights the Saudi economy’s status as the largest in the region, as well as reasoning that it is well positioned to outperform others countries in the face of the current global economic downturn.

“KSA also enjoys low levels of debt in both public and private sectors and 25% of global oil reserves. It’s the world’s fastest growing large country with a population in excess of 25 million, 40% higher than the combined population of rest of the GCC,” commented John Harris, head of KSA operations for Jones Lang LaSalle. “In addition, almost 50% of the total population is below 20 and the country is one of the world’s fastest urbanising countries.”

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The region’s largest economy with a nominal GDP of US$ 608 billion – a figure that is 20% more than the total combined GDP of the other GCC countries – the KSA has delivered five years of continued economic growth, with its GDP increasing by an average of 15% per annum since 2002 and receiving over US$ 17.5 billion in 2007.
 
The current stock of commercial space is planned to increase by more than 60% by 2012 with the residential sector poised for significant growth; over the same time period, the major housing shortage, which currently runs at over 500,000 units, is expected to double. All the signs indicate that the hotel sector, particularly linked to religious tourism, will boom to much the same degree.

Abdollah Al-Faadhel, director of Jones Lang LaSalle’s KSA branch added, “Given the size of the market, the current economic status and the demographics in place, we expect to see a substantial increase in demand for advisory services in the KSA, as investors look for opportunities in the region with minimal exposure to the global financial conditions.”