Kingdom needs 100 malls worth 20 billion riyals in 10 years
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Riyadh leads Saudi cities in the number and growth of major shopping malls

Riyadh leads Saudi cities in the number and growth of major shopping malls

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Mr. Fahad bin Abdullah Al Othaim, CEO of Al Othaim Real Estate Investment and Development Company, stressed the importance of the real estate industry in the Kingdom in driving development and achieving more progress and prosperity for citizens, indicating that expectations indicate that real estate investments in the Kingdom will exceed 1.5 trillion riyals during the year 2010.

The Saudi real estate market provides stimulating opportunities for investors and real estate developers, as it is considered the largest in the region, and its importance increases with the rapid growth in the population, which is expected to reach more than 50 million people by 2050
Ka talked about many matters related to the real estate industry in the Kingdom through this dialog :
Q: How do you see the future of the real estate industry in the Kingdom? <We have great confidence that the Saudi real estate market will maintain its attractiveness and vitality, and overcome the repercussions and effects of the global financial crisis that cast a shadow on global markets,
We are confident that the Saudi real estate market will maintain its attractiveness and vitality, and overcome the repercussions and effects of the global financial crisis that has cast a shadow on global markets.
There are many stimulating and attractive factors that will push the market and enhance its opportunities to achieve further growth, in particular the continued government spending on development projects, the availability of the appropriate environment for the establishment of mega real estate projects, the establishment of integrated economic cities, as well as the growing population growth in the Kingdom, which represents an important tributary to the real estate market and its growth opportunities, as well as the cohesion and strength of the Saudi economy.
The real estate industry in the Kingdom of Saudi Arabia is considered one of the stimulating industries that push the wheel of development in the country to further progress and prosperity, as studies indicate and confirm expectations that real estate investments in Saudi Arabia will exceed 1.5 trillion riyals during the year 2010 (according to a report prepared by the Global Investment House (Global)
What are the additions that the real estate industry can achieve in supporting the local product? The contribution of the real estate sector to the local product is close to 55 billion riyals, according to reports issued by the Council of Saudi Chambers, which indicated that real estate activity is expected to grow by the end of 2009 at a rate of 5.8% and that its contribution to the local product will rise to more than 7%, approaching 60 billion riyals.

What is your assessment of the investment opportunities provided by the real estate market in the Kingdom? The Saudi real estate market provides stimulating opportunities for investors and real estate developers, as it is considered the largest in the region, and its importance increases with the rapid increase in the population, which is expected to reach more than 50 million people by 2050, according to a report issued by the Saudi British Bank (SABB). It is certain that the population increase will double the volume of demand for housing units to a figure exceeding 2.5 million units during the next 20 years, especially since estimates indicate that more than 50% of the population does not currently own private housing. According to the real estate report issued by the Global Investment House (Global)

<What is the future of the mall industry in the Kingdom in general and Riyadh in particular? Available studies in this field indicate that the Saudi market needs during the next ten years more than (100) large shopping centers with investments exceeding (20) billion riyals (ten centers per year), in order to keep pace with population growth and rapid urban expansion accompanying this growth.

As for Riyadh, it leads the Saudi cities in the number of major commercial complexes and is considered the fastest growing city in this field, compared to the population of 4.5 million people, with a growth rate exceeding 6 %, and there is no doubt that population growth has helped increase the volume of investment in commercial centers. Riyadh is poised to witness an accelerated growth in the number of commercial centers, making it the fastest growing Arab capital in this field.

S: From your point of view, what are the reasons for ignoring real estate experts by project owners? Is it a weakness in the investor's culture, or the growing role of weak real estate professionals who fell in the middle of the road? - If this disregard is a phenomenon or behavior, it is in a previous period ... Where some investors used to view advisory matters as not constituting assets even though they pay such value and even more in other ways
- But the real estate services market is now on its way to professionalization in light of many local and global variables ... Where the view of experts and consultants is no longer as it was before ... and project owners no longer view consulting costs as an extra expense ...

What role can major shopping centers play in supporting tourism within the Kingdom?

Malls in Saudi Arabia are considered one of the most important commercial tourism interfaces that make the Kingdom a first and main stop for Gulf tourists.
A recent Saudi field study conducted on some tourist destinations and commercial centers indicated that visitors to closed commercial centers approached 10 million visitors during the year. Here we must point out the keenness of commercial centers to establish miniature entertainment centers inside them as a kind of internal tourist entertainment, as these centers have become an important attraction for their visitors from Saudi families.

S : Have you thought about activating cooperation between the public and private sectors regarding housing in relation to the prices of land and building materials? - If we take into account that comprehensive development is the most important solution to the housing crisis in Saudi Arabia, and it is the main pillar of housing development through its many benefits and multiple positives, the activation of cooperation should be in the following: The government sector, which is to organize services and facilities and ensure the establishment of advanced neighborhoods according to the concept of comprehensive development, making them model neighborhoods that increase in value over time.
In this way, the golden equation of this cooperation is achieved, where developers accomplish their projects and achieve their profitability goals and the citizen receives the appropriate high-quality housing, in an integrated environment.

S : It is said that the real estate market has become attractive to local and regional companies. How do you explain this? The Saudi market is currently witnessing an increase in demand for real estate of various types ... The opportunity is favorable at the present time to double real estate investment, especially since it is considered a safe haven, God willing, from the occurrence of crises and economic fluctuations.
Advice, if I may call it advice ... The low prices of building materials and the stagnation of small products have increased the temptations of the real estate market for small products, as the opportunity will be favorable in the coming years to increase investments in this aspect.

S: Many local real estate investors tended to invest in neighboring countries, to what do you attribute this? I think this phenomenon is temporary, especially if we take into account the investment advantages available in the Kingdom that are not available to other countries in the region.

S: From your point of view, are there risks facing real estate investment in Saudi Arabia in particular and the Gulf countries in general, and what is the quality of these risks? - Investment in the real estate market is considered one of the safest and least risky investments, as the real estate market is one of the most important pillars of the Saudi economy, and the largest national and foreign savings and investments are heading towards it.
- Also, the Gulf market is still tempting investors in various types of real estate products, and promises a promising future due to the strength of the economies of these countries and the political stability of their systems and the need of their populations for real estate products in light of the rapid growth of the population of the region, especially the Kingdom of Saudi Arabia.
- Here it is necessary to unite efforts between the GCC countries to overcome obstacles and issue regulations that serve and promote the real estate market
- It is necessary to enter into strategic alliances between real estate companies within the local framework and within the framework of the countries of the region in order to serve the real estate sector, and the ability to compete with major companies.

S : What are the conditions for a good investment in the field of commercial centers? The project must be studied in detail. The investor must be a good reader of the market and its trends. The importance of choosing a good location. Determine the goals. Identify the target customers. Adhere to the best standards in design and implementation. Attracting global and local brands. The importance of customer retention.

S: Do real estate conglomerates help the investor to enter the real estate market with confidence? In light of the Kingdom's accession to the World Trade Organization, and after the door is open to major non-Saudi companies, which are companies that possess economic components and high and distinguished expertise that seek to acquire a large share of the market, the new reality requires the creation of major real estate conglomerates capable of moving the market positively to enable these companies to achieve the required balance.

Real estate conglomerates.

S: What is the added value to the Saudi market through the mortgage law? - The mortgage law in addition to the complementary real estate regulations expected to be issued will play an important role in developing and increasing the effectiveness of the Saudi real estate market.
- Perhaps the adoption of these legislations will attract more foreign investments to the market and make it have more confidence in the foreign investor. Most importantly, these regulations will transform the market into a more professional and industry that has its origins and will inevitably be managed with scientific and academic thought that keeps pace with the development in the world.

S : What does the real estate market lack to become the best? In fact, the real estate market is the best and most attractive ... and this preference will continue, God willing, in light of the investment and economic components enjoyed by the Kingdom. It remains important to ensure that regulations and legislation keep pace with the real estate market with its rapid developments.