Savills Real Estate Services predicts a significant jump in global real estate investment activity through 2025, with a strong recovery in capital values. The MENA region, including Saudi Arabia, Egypt and the UAE, is estimated to be among the main beneficiaries, thanks to ambitious economic projects, infrastructure development and growing demand for real estate.
Markets recover and prices improve
<According to Paul Tostevin, Head of Global Research at Savills, the factors that have pressured real estate prices globally are beginning to ease, setting the stage for a significant recovery in real estate capital markets. This optimism is supported by the resilience of MENA markets, with Richard Ball, Head of Professional Services and Advisory in the Middle East, citing the region's ability to adapt to global economic shifts, driven by innovation and sustainability as key elements.Richard Ball, Head of Professional Services and Advisory in the Middle East, pointed to the region's ability to adapt to global economic shifts, driven by innovation and sustainability as key elements.
Investment boom expected
Global real estate investment is expected to grow by 27% to reach $952 billion in 2025, surpassing the $1 trillion mark by 2026. According to a global survey of 33 real estate research professionals conducted by Savills, optimism prevails across all real estate asset classes, with a clear momentum in the Middle East and North Africa (MENA) markets. This momentum is driven by ambitious infrastructure development initiatives and policies that attract foreign direct investment (FDI).
Drivers of real estate growth in the region
The premium office market is one of the key drivers of real estate growth in the MENA region, with leasing activity and rents expected to increase in major cities such as Dubai and Riyadh. Saudi Arabia's Vision 2030 is reinforcing this trend with mega projects such as NEOM and the Red Sea Project, which are major attractions for office and luxury residential developments.
In the UAE, the economy is continuing to grow, and the premium office market is a key driver of real estate growth in the MENA region. <In the UAE, the economy continues to benefit from its position as a global center for trade and tourism, adding to the country's appeal to international businesses and investors.
Promising opportunities in other real estate sectors
In addition to premium offices, secondary offices are receiving increasing interest from value-added investors, amid expectations of modest rent increases. In the industrial and logistics sector, prospects are bright thanks to the expansion of e-commerce and the region's strategic role in global trade. Logistics facilities and distribution centers in Dubai and Jeddah are well positioned to capitalize on these trends.
Retail momentum returns
The retail sector is also seeing a marked improvement, fueled by increased consumer confidence and rising sales volumes. Real estate developers are focusing on creating mixed-use shopping destinations that meet evolving consumer expectations.
Real estate developers are focusing on creating mixed-use shopping destinations that meet evolving consumer expectations.
Sustainability, meanwhile, remains a key focus for real estate investments in the region. Recent years have seen significant progress in the adoption of green building practices, renewable energy, and sustainable urban planning, enhancing the attractiveness of long-term investment in regional real estate markets.
<Savills" positive outlook confirms that the MENA region will continue to be a key player in the global real estate landscape in the coming years. With a focus on innovation and sustainability, the region looks set to attract further investments that will boost its economic growth and international competitiveness.
Savills" positive outlook confirms that the MENA region will remain a key player in the global real estate landscape in the coming years.
