Jones Lang LaSalle (JLL), a leading global real estate advisory and management services firm and the largest of its kind in the Middle East, has predicted that the Kingdom's real estate sector will gain 10% over the next 12 months, far exceeding the expected growth rates of other Middle Eastern markets.
\nThe firm's recent investor sentiment study shows that investors expect the Kingdom's real estate market to be the strongest performer in the Middle East a year from now, with 40% of investors surveyed believing that the Saudi real estate market is starting to recover, and another 40% expecting a full recovery by the end of the year.
\nCommenting on the findings, John Harris, head of Jones Lang LaSalle's Saudi Arabia and MENA practice, said: \u201cThe report shows that the Saudi market enjoys greater maturity and stability compared to other markets in the region. He stressed the positive role played by the government of the Custodian of the Two Holy Mosques in achieving economic stability as one of the most important reasons for the return of investor confidence in the performance of the Saudi real estate market, and expected this trend to continue with the increase in the number of investors from within the Kingdom.
\nThe kingdom's residents have always dominated the market, but in recent months they have shown a strong appetite for local assets at a time of global instability.
\nJones Lang LaSalle said in its report titled \u201cMENA Real Estate Investor Sentiment and Trends\u201d that while investors recognize the strategic importance of the Kingdom, they are finding it difficult to find opportunities that deliver the returns they expect. While investors surveyed expect returns in excess of 12%, in the last year there has been a decline in the initial yield to below 10%, due to the limited supply of investable class assets, Jones Lang LaSalle said in its report.
\nDespite this, there are still more buyers than sellers of investable assets in the Kingdom, keeping demand high. The report also showed that investors are looking for opportunities in Saudi Arabia away from traditional cities such as Jeddah and Riyadh by heading to the Eastern Province (where there is interest in mixed-use real estate development along the coast) as well as in the holy cities of Makkah and Madinah.
\nAndrew Charlesworth, Head of Capital Markets at Jones Lang LaSalle MENA, said: \u201cTwo key factors appear to be driving the outlook, with investors focusing on markets with indicators of strong demand (defined by the local population) and markets with key economic growth drivers (such as oil and gas), with the Kingdom being the only country in the region that offers both.\u201c.
\nThe report indicates a significant increase in the percentage of investors who believe that the Saudi real estate market will achieve the strongest performance among the markets. In October 2009, both Saudi Arabia and Abu Dhabi received the same 26%, but the percentage increased in Saudi Arabia to 30% and Abu Dhabi fell to second place with 25%, followed by Egypt in third place with 13%.
\nJones Lang LaSalle's fourth investor sentiment study surveyed more than 100 investors, including institutional investors, sovereign wealth funds, investment banks, private equity firms and large investors. <\/p>","protected":false},"excerpt":{"rendered":"
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