The reality of the real estate market is influenced by surrounding factors and variables, the most significant of which is the tremendous technological boom in the field of communications, as the world has become inundated with ”digital technology.” Consequently, modern and rapid modes of transportation have been developed, This shift has transformed the real estate market into a large-scale economy and given rise to new alliances, which will have a profound impact on reshaping the real estate market in the near future to an extent that many real estate professionals do not anticipate.
The “Amlak Real Estate” newspaper presents the most prominent and important forecasts and trends for the commercial real estate market over the next ten years, based on studies, analysis of real estate indicators, interpretation of preliminary data, and comparisons with similar trends in other countries. What we are seeing—commercial streets crowded with numerous shops and offices—is a phenomenon that has spread throughout all neighborhoods in the Kingdom’s cities, especially the major and up-and-coming cities. “Amlak” predicts that this phenomenon will decline and expects it to disappear in the coming period for several reasons, including:
First: We observe an increase in the scope of electronic transactions due to the revolution in communications and internet technologies in buying, selling, and leasing, which will lead to a decline in the number of small shops and offices, Add to that traffic congestion, which consumes a great deal of time that can be saved by a phone call or clicking a button on the relevant company’s website.
Second:The trend toward economies of scale in services and entertainment, with new companies competing fiercely against one another, has led to the development and growth of massive markets and complexes offering a full range of services—including entertainment, parking, and retail—to meet the growing demand.
Third: Large companies and business alliances are moving to open complexes and markets with integrated services; indeed, due to the intensity and ferocity of competition, they are even opening branches of these large markets in most neighborhoods to better meet consumer demand and provide better service.
Fourth: Real estate and stores that rely on roads, cars, or foot traffic will shrink or disappear entirely with the opening of modern transportation networks, such as bus stations and rail systems.
Fifth: The general lack of adequate parking for customers weakens these properties; parking is undoubtedly a fundamental requirement that significantly influences demand for commercial real estate.
Sixth: The slowdown in economic growth, reduced government spending, and global competition undoubtedly remain important factors influencing economic activity in the Kingdom.
Seventh: Government regulations and procedures, along with rising costs for small and medium-sized enterprises, hinder demand and the willingness to engage in economic activities that stimulate the real estate market.
Based on these brief observations and the factors we have mentioned, we anticipate that the Kingdom’s commercial real estate market will face multiple challenges in the coming period. However, the innovations and initiatives we are currently observing remind us of the “Silicon Valley”—most of which is a digital boom whose limits and resilience in the face of rapid technological development and risks remain unknown. However, we do not expect these innovations to contribute positively to stimulating or increasing demand for commercial real estate.
Editor-in-Chief
