Collaboration needed to 're-claim' Saudi property's self-build share
Abdulrahman Almofadhi, who chairs real estate firm Sreco's board, says developers in the kingdom must collaborate to meet end-user needs
Saudi Arabian real estate firms must look more closely at the gaps in local market and collaborate to build commercial and residential spaces, the chairman of the Al Akaria Real Estate Company’s (Sreco) board of directors told Construction Week.
Abdularahman Almofadhi, chairman of Sreco’s board, said real estate products in the kingdom must be better aligned to the Saudi population’s needs in order to divert investors away from the self-build market.
“The reality is that in the context of the kingdom, there are no large master-plan driven developers like Sreco,” he explained, adding that the unregulated market – such as small developers and builders – are an “important component of any open market economy”.
However, he said that real estate firms “need to have a closer look at the current gaps in the Saudi market”.
He added: “At Sreco, we have carefully analysed the population of Riyadh, and identified three target groups along with their preferences – Saudi national millennials and Generation Z; Arab expatriates; and international, non-Arab expatriates.”
Almofadhi also outlined four key trends that he believes are shaping the consumer and residential real estate market in Saudi at the moment. These include the growth of a young population that marries and starts families early; a decreasing average household size implying a “gradual shift towards smaller units and vertical residential developments”; and branded residences at the early stages of development but with “enormous potential”.
Other trends influencing Saudi real estate include high demand for “quality space and supporting services” such as entertainment, leisure, and food and beverage options.
With this in mind, Almofadhi, who become Sreco’s board chair four years ago, argued that if developers in the kingdom can “come together” and build residential and commercial spaces that meet these needs, “we can re-claim market share from the self-build market”.
Speaking to Construction Week last month, Almofadhi said the real estate market in Saudi, the 13th largest state in the world by land area, continues to present challenges.
He cited developers suffering from price volatility creating additional complexity at the planning phases as just one example.