A recent report issued by JLL on the real estate market in Jeddah for the third quarter of 2018 growth in ongoing investments in the infrastructure and non-oil sectors. The report noted that this growth will, in the long term, offset the current market stagnation and restore balance following a slowdown in performance.
The report noted that this quarter saw the completion of two major projects in the office space sector, adding a total leasable area of 1.05 million square meters to the market, despite a wave of delays in the completion of some projects.
JLL noted that the downward trend in office rents continued during this quarter, with vacancy rates continuing to rise amid new supply, noting that transportation infrastructure projects in Jeddah are paving the way for improved connectivity between Jeddah and other Saudi cities, which will positively impact future demand for office space.
The third quarter of the year saw the launch of the first trip of the Al-Haramain High-Speed Rail from Al-Sulaimaniyah Station in Jeddah, This project connects Jeddah with Makkah and Madinah and improves access to King Abdulaziz International Airport and the King Abdullah Economic City in Jeddah and Madinah as well.
For her part, Dana Salbak, Senior Director of Research at JLL for the Middle East and North Africa region, Dana Salbak, said that although the market continued to decline during the third quarter, advanced infrastructure projects aimed at making Jeddah a more connected city represent a positive step toward attracting more investment opportunities.
Rental rates and vacancy rates in the retail sector remained unchanged during the third quarter, with no new projects completed in this sector.
The report noted that movie theaters, food and beverage outlets, and other entertainment options remain a key attraction for shopping centers and are expected to play a greater role in their performance in the coming period.
The report predicted that sentiment in the hotel sector will improve in the long term, given the ongoing development of the Kingdom’s entertainment sector.
