JLL: E-visas, giga-projects boost Saudi Arabia real estate outlook
Saudi tourism, which was traditionally religious and domestic, is evolving based on a pipeline of entertainment options
Saudi Arabia’s launch of international tourist e-visas, as part of its Vision 2030 initiative to increase global competitiveness, combined with its tourism giga-projects, are set to have a positive long-term impact on the kingdom’s real estate market, according to JLL’s KSA Real Estate Market Q3 2019 report.
In an effort to diversify the Saudi economy away from its dependence on oil, the government launched a number of tourism giga-projects, including the Qiddiya entertainment city, Neom, the Red Sea Project, and Majid Al Futtaim’s largest ski slope in the region, and in turn has stimulated real estate development and new investor opportunities.
According to the JLL report, evolving tourism demographics are set to have a positive long-term impact on the hotel sector, which has traditionally been driven by religious and domestic travel, but is evolving to attract a wider tourist base with a future pipeline of more luxury hotels, entertainment destinations, and resorts.
Commenting on the impact of tourism on real estate, research director at JLL, Dana Salbak, said: “With the kingdom opening up to more international tourism there is a positive long-term outlook for the hotel sector in particular, with the pipeline expected to grow in the next 12 months on the back of continued investments in infrastructure and the entertainment and tourism developments.”
Salbak added: “Increased demand for a more diverse hotel pipeline is expected to drive future investments and trigger large-scale real estate development by the public and private sectors. The anticipated influx of international tourists also has the potential to boost spend in the retail and entertainment sectors and stimulate job creation.”
The report stated that sale prices and rental rates in Saudi Arabia’s residential sector during Q3 2019 continued to witness a slowdown, albeit marginal, indicating further signs of the market reaching the bottom of its cycle.