Arabian Business, Sunday, Nov 24, 2019 | Rabi Al Awwal 27, 1441
New tourist visas to deliver long-term boost to Saudi real estate, says JLL
Saudi Arabia:
The recent launch of international tourist e-visas in Saudi Arabia is set to
have a positive long term impact on the kingdom’s real estate market, according
to JLL’s latest market reports.
In efforts to diversify the economy away from oil the government launched
tourism giga-projects across the Kingdom and most recently new e-visas for 49
countries to boost international visitor arrivals.
JLL said these initiatives and ongoing reforms are set to shape a more diverse
hospitality landscape, stimulating real estate development and new investor
opportunities.
“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,” said Dana Salbak, research director,
JLL MENA.
Salbak added that evolving
tourism demographics are set to have a positive long term impact on the hotel
sector. Traditionally driven by religious and domestic travel the hospitality
landscape is evolving to attract a wider tourist base with a future pipeline
consisting of more luxury hotels and resorts.
“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,” she
said.
During Q3, Riyadh saw occupancy
rates improve to 54 percent for the year to August versus 52 percent a year
earlier while average daily room rates (ADR) dropped 9 percent.
In Jeddah, hotel occupancy
rates declined marginally to register 60 percent while ADR and revenue per
available room continued to soften.
“We are witnessing an exciting
and major turning point for the kingdom’s tourism industry, with new economic
reforms opening the doors to leisure and business travelers across the globe.
The evolving landscape is stimulating a wave of future investment and
development opportunities, driving momentum in the hospitality and wider real
estate sector,” said Thierry Delvaux, CEO, JLL, MEA.
JLL's report said in Q3, sale
prices and rental rates in the residential sector continued to witness a
slowdown, albeit marginally, indicating further signs of the market reaching the
bottom of its cycle.
However, it added that there is
a positive long-term outlook as current dynamics are expected to pick up on the
back of housing initiatives tackling the shortage of affordability.
JLL also said that as the
kingdom continues to push ahead with giga-projects and encourage private sector
participation in the economy, the office market is expected to regain some
momentum, particularly high quality Grade A office space with better
connectivity and amenities.
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