* Amlak monitors the phenomenon and talks to investors and owners of real estate offices about it
\n* Investors are actively looking for land and houses in old neighborhoods to rebuild!
\n* Older neighborhoods are close to the heart of the city, markets and services and are in demand by expats and some Saudis
\n* The cost of construction is low, demand is high, selling is easy, and investing is worthwhile!
\n* We call on the Municipality to re-plan these neighborhoods and widen their streets to suit Saudi families
\n* ROI in old neighborhoods 10% and in new ones only 7%!
\n* Contractors are cheaper, labor is available and close to home
\nMost households are looking for better housing and cheaper rent
\n* Prices vary between 650 riyals per meter of residential land and 3,000 for commercial
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\nA new phenomenon has begun to spread in the old neighborhoods in Riyadh, monitored by \u201cAmlak\u201d, where it saw an unprecedented crowd of real estate investors on these neighborhoods in search and demand for land and houses to buy, rebuild and invest in rent due to the great demand by large categories and large segments of expatriates families and singles, employees and workers, as well as a not small segment of Saudi families with limited income and some singles from employees in small military jobs or security guards coming from remote places, all looking for low rents that match their incomes. \u201cAmlak met a number of investors and owners of real estate offices in these neighborhoods and talked to them about the details of this phenomenon and its causes. What did they say?.
\nClose to the city center:
\nAmlak asked Mr. Bandar Al-Mughaisib, one of the investors in Al-Jaradiyah neighborhood, about the reasons that prompted some investors to move towards establishing new buildings in these old neighborhoods, and most of the answers agreed that these old neighborhoods have become investment feasible now because they are close to the heart of the city, and enjoy the advantages of easy access to most areas of the capital, and are covered with services and facilities, unlike the new neighborhoods, and the biggest reason is the low value of land in these neighborhoods, and because the rents are cheaper compared to other neighborhoods, demand for rent is greater than others, and for those who want to sell, it is more expensive than other neighborhoods.<\/p>\n
But are there any proposals to develop these neighborhoods to make them suitable for the Saudi family? I am not a specialist in these matters, as the Riyadh Municipality is sufficient, but I believe that these neighborhoods can be developed by paving, lighting and expanding the streets, widening their entrances, removing dilapidated and old buildings that pose a security risk to their residents, and building new housing units.<\/p>\n
As for the type of tenants who live in these neighborhoods, Al-Mughaissib said: As for the largest percentage of the residents of these neighborhoods, whether they are singles or families, he believes that most of them are families, due to the real estate owners who allocate them to families, due to their high demand for housing, as well as to avoid the troubles that may occur from the housing of singles, as for the majority of the nationalities of these neighborhoods, they believe that most of them are Saudis, but there are also other nationalities.<\/p>\n
The land is 250-300k:
\nAs for the prices of old houses if they are valued as land at the current price, Al-Mughaisib believes that they differ between old houses, some of which are more expensive than the house, and the value of the old villa ranges between 300 to 400 thousand SAR, and the value of the land ranges from 250 to 300 thousand, and there are some houses whose price is between 180 to 250 thousand, and the price of the land is between 200 to 300 thousand. We asked about the desired and preferred streets for the consumer and investor in these neighborhoods, and the response was that for the consumer, the internal streets are 15m to 20m wide, while for the investor, the main streets are 60m, 40m, and 30m wide.<\/p>\n
He said that there is no doubt that investor demand for land in these neighborhoods has increased dramatically, as some investors buy land and build, while others buy old houses and rebuild them As for the presence of many abandoned houses in the area and the reasons for their abandonment, he says that there are some abandoned houses whose owners left them long ago, neither renting them, nor selling them, and this is due - from his point of view - to the owners' desire for high prices, like the prices of some other neighborhoods, and it may be for other commercial reasons.<\/p>\n
As for the work characteristics of most of the residents in this area, Al-Mughaissib said: Most of them are small employees in the government sector, both civilian and military, and some of them are employees in the private sector, and whether he thinks that this neighborhood is densely populated, he said: Yes, and the reason is that they are low-income people, sometimes there are more than one family in one residence, and the other and most important reason is the low value of rents compared to other neighborhoods.<\/p>\n
Return on investment in old neighborhoods is higher than new!
\n\u201cAmlak\u201d moved to the old Badiaa neighborhood (Al-Qary) and met with Mr. Mohammed bin Fahd Abu Nayyan, one of the owners of real estate offices in the neighborhood and asked him about the reasons why some investors tend to build new buildings in those old neighborhoods, he replied that the return on investment here reaches 10%, while in other neighborhoods and northern Riyadh it reaches only 7%, as the construction here is silent, and most of them are apartments, while in other neighborhoods it is rebounds. And because it is more income and more economical when building, because the meter in these neighborhoods is much lower than in high-end neighborhoods, and contractors are cheaper, because labor here is available and close to their housing, and because it is densely populated and most of its residents are foreigners, and most investors do not prefer the Saudi tenant, because the foreigner pays first, and this may be due to the foreigner's fear, while the Saudi does not pay because he knows that there is no system that protects the investor. <\/p>\n
When asked about how to develop these old neighborhoods to make them suitable for Saudi families, Abu Nayyan said, \"It is by removing the old buildings, building modern buildings and providing all the services: As for the quality of the tenants, he said that the majority of them are low-income people with small jobs, some of whom have no job, and most of their nationalities are poor Saudis, and there are other nationalities such as Sudanese, Pakistanis, Yemenis, and most of them are single people.<\/p>\n
As for the prices of old houses if they are valued as land at the current price, Abu Nayyan said: For example, a popular house with an area of 90 m to 150 m may reach a price of 200,000 riyals, yet its new owner prefers to demolish it and rebuild it again, as for the land, the price per meter ranges from 800 to 1000 riyals, and about the desired and preferred streets for the consumer and the investor, he said that they are for the investor in these narrow neighborhoods with a street width of 8 m to 10 m. As for the consumer, he has no difference, the important thing is the good price.<\/p>\n
Highly sought after by investors:
\nHe said that he has recently noticed an increase in requests to buy land and rebuild old buildings unexpectedly, and I know an investor who has been searching in the old neighborhoods for about four months and has not found anything yet. He mentioned that most of the residents of this neighborhood are low-ranking military personnel, security guards, and people from the south, and said that this neighborhood is densely populated, but it is less dense than other neighborhoods such as Shamisi or Manfouha, because most foreigners want Shamisi and Manfouha, because of their proximity to their fellow countrymen and proximity to popular markets.<\/p>\n
We asked Abu Nayan about the reasons why some investors go to build new buildings in these old neighborhoods: The availability of services, lower prices, randomness, silent construction, as there are no restrictions in construction, because it is considered popular construction, and therefore gives a wide field for the investor, and whether he thinks that tenants are more in this neighborhood than owners, he answered yes, because the neighborhood began to shift from villas to the system of small economic units, but why do investors prefer internal properties near the main streets, and the answer was that these streets are closer to services, better security, allowing multiple floors in them, the availability of services, and the large return.<\/p>\n
As for the possibility of developing these neighborhoods to suit the Saudi family, Abu Nayyan said that this can be done by improving services, allowing multiple floors, amending the building system, expanding and rehabilitating the streets, and about the quality of tenants in the neighborhood, he said that they belong to all nationalities and most of them are from Arab, Egyptian and Syrian nationalities, and as for the prices of old houses if they are valued as land at the current price, he said that they are estimated between 800 to 1000 riyals per meter for residential and commercial from 1500 to 2500 per meter.<\/p>\n
He said that the preferred and desirable streets for the consumer and investor in this neighborhood are the commercial streets, because they are few because the system serves them with multiple floors. He said that he has recently noticed an increase in requests to buy land and rebuild old buildings in the neighborhood due to the lack of land and the entry of new investors into the market, noting that most of the residents in the neighborhood are technical workers, and said that the neighborhood is characterized by high population density, due to the availability of services.<\/p>\n
Optimization is possible to suit the Saudis:
\nHe said that investors prefer internal properties close to the main streets because of their proximity to services, their convenience in terms of security, and because the rental price is better. As for what can be done to develop these old neighborhoods to suit the Saudi family, he said that this is possible by developing them, expanding the streets, re-planning narrow streets, and intensifying the security presence, and said that the majority of tenants are expatriates, mostly Africans, and the largest percentage are families, followed by workers.<\/p>\n
As for the prices of old houses if they are valued as land at the current price, Abu Nayyan said that they range from 650 to 750 riyals per meter for residential, and commercial up to 2000 riyals per meter. He said that the preferred streets for the consumer and investor in the neighborhood are commercial streets because they are allowed to have multiple floors, and said that recently he noticed an increase in requests to buy land and rebuild old buildings, and there are abandoned houses that pose a danger to the neighborhood. He pointed out that the reason for their abandonment is sometimes due to the fact that they are an old endowment and their owners have forgotten them. He said that the work of most of the residents in this neighborhood are private sector employees and low-income people who have difficulty paying their rents, noting that the high population density in the neighborhood is due to the fact that the rents are lower than in neighboring neighborhoods.<\/p>\n
Mr. Abdulrahman Al-Mughaylith ............................. Abdulaziz Al-Budairi ............. and Mohammed Al-Mughaylith ............................. In most of what their colleagues went to talk about the reasons for the phenomenon of the return of investors to the old neighborhoods, to buy land and buildings and rebuild them, because of the similarity of conditions as land and buildings are cheap, and tenants are many and most of them are expatriates and Saudis with limited income and small employees, and whether it is possible to develop these neighborhoods to be suitable for the Saudi family, these speakers saw the possibility of this through expanding and paving streets, developing services and providing a security presence.<\/p>\n
Looking for better housing and lower rent!
\nIn the Shamisi neighborhood, Amlak met one of the owners of real estate offices, Mr. Ahmed bin Abdulrahman Al-Abbad, and his answers were close to the answers of his previous colleagues due to the similarity of conditions in the old neighborhoods, but he explained that most people want to leave the old houses and live in new buildings, close to the previous rent, due to the presence of these neighborhoods in the city center, and their proximity to services and markets, and about the reasons why investors prefer internal properties near the main streets, he said that it is due to the ease of exit and entry into the neighborhood, its proximity to the main street and services and because it is safer than the internal streets.<\/p>\n
As for the possibility of developing these old neighborhoods to suit the Saudi family, Al-Abbad said that this is possible by developing them, re-planning them like the new plans, widening the streets, building parks in them, and establishing green spaces like the neighborhoods in northern Riyadh, so that the streets are not muffled, because they cause security risks. As for the quality of tenants, he said that most of them are foreigners of Pakistani nationality with other nationalities, who live more than 20 people in popular houses to reduce the cost of rent, and explained that the largest percentage of the population is foreign singles with a percentage of poor families of Saudi and other nationalities.<\/p>\n
As for the prices of old houses if they are valued as land at the current price, Al-Abbad said that a popular house with an area of 80 m is about 1000 riyals per meter, while the land starts from 1000 riyals to 1500 riyals, although the closer the land is to the main street, the higher its price, if the house is built, its price will decrease because whoever will buy it will demolish it and then rebuild, he said that the streets that are desirable for the consumer and investor are: For the consumer, it should be on a street with a width of 15 m and above because of the availability of parking lots, while the investor prefers main streets from 30 m and above because there are more floors and thus more apartments.<\/p>\n
He said that he has recently noticed an increase in requests to buy land and rebuild old buildings unexpectedly, and the demand for old houses has increased in order to take advantage of its land and rebuild it, because construction in Shumeisi is cheaper than other neighborhoods due to the availability of labor and its proximity to services, markets and work sites and the cheap cost of construction, so tenants prefer it, especially those who work in popular markets near the neighborhood, because they save the value of using a taxi (limousine) for those without a car, for example 90% of buildings behind Bin Dail markets have been rebuilt.<\/p>\n
Why don't they want to sell their old properties?
\nHe added that some people now do not want to sell their old properties, as the owners behind the Mecca markets hold on to them, thinking that the Municipality plans to develop the area like some nearby neighborhoods, which would then raise their value. He said that this neighborhood is very densely populated, because the rents are much lower than other neighborhoods, and Abad appealed to officials in the Riyadh Municipality to look for a solution for the dilapidated popular houses He said that this neighborhood is very densely populated, because the rents are lower than other neighborhoods, and he appealed to the officials of the Riyadh Municipality to look for a solution to the dilapidated popular houses in this neighborhood, because they pose a danger to the lives of citizens as well as a security risk, because they are used as a shelter for drug addicts and kidnappings, and they are not a civilized facade for a city like Riyadh.<\/p>\n
Amlak met with a number of other owners of real estate offices in the old neighborhoods of Riyadh, namely professors Saleh bin Ahmed Shatour ...................., Abdulaziz bin Saleh Al-Eid ............................, Saleh Al-Qasim (Khairin Real Estate Holding Company), Zafer bin Mubarak Al-Breik ...............................Saad bin Mohammed Al-Oibani ..........................., Saad Al-Naima .............................., Fahad Al-Mukhaileeb (Fahad Al-Mukhaileeb Office) Their answers and opinions were mostly consistent with what their colleagues we have already talked to, and one of the most important things they focused on was that the reasons for the phenomenon of investors returning to the old neighborhoods, to buy land and buildings and rebuild them, is due to the similar conditions in these neighborhoods, land and buildings are cheap, and tenants are many and most of them are expatriates and Saudis with limited income and small employees.<\/p>\n
Prices varied between 650 for residential and 3000 for commercial:
\nAs for whether it is possible to invest in these old neighborhoods for the housing of Saudi families, these speakers said that this can be achieved by expanding and paving the streets, developing services and providing a security presence. As for the prices of old houses if they are valued as land at the current price in these neighborhoods, our interlocutors said that they range between 650 to 750 riyals per meter for residential, while commercial reaches 2000 riyals per meter, and in another neighborhood the prices reached between 1000 - 1200 riyals for a residential meter overlooking a single street, while the price rises to 1300 riyals for residential, and commercial reaches 2500 - 3000 riyals.1,200 riyals for a residential meter overlooking one street, while the price rises to 1,300 riyals for residential, and commercial reaches 2,500-3,000 riyals, and in another neighborhood the price reached more than 1,000 riyals per meter if the land is residential, while commercial exceeded the barrier of 2,000 riyals.<\/p>\n
As for the recent demand by investors to buy land and rebuild old buildings in these old neighborhoods, our interviewees said that they notice this unexpectedly, to take advantage of these old lands and houses and rebuild them, because building in these old neighborhoods is cheaper than other neighborhoods due to the availability of labor and its proximity to services, markets and work sites and the cheap cost of construction, so tenants prefer it, especially those who work in the popular markets near these neighborhoods.<\/p>","protected":false},"excerpt":{"rendered":"
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