{"id":14911,"date":"2024-02-14T07:33:02","date_gmt":"2024-02-14T07:33:02","guid":{"rendered":"https:\/\/www.creationbc.com\/?p=14911"},"modified":"2025-12-01T11:36:15","modified_gmt":"2025-12-01T11:36:15","slug":"saudi-arabias-real-estate-boom-insights-for-the-ceos-exploring-expansion","status":"publish","type":"post","link":"https:\/\/www.creationbc.com\/en-sa\/news\/saudi-arabias-real-estate-boom-insights-for-the-ceos-exploring-expansion\/","title":{"rendered":"SAUDI ARABIA\u2019S REAL ESTATE BOOM: INSIGHTS FOR CEO\u2019s EXPLORING EXPANSION"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]This article has been researched and written by the team at Creation Business Consultants. AI has not been used in generating this article.<\/strong><\/em><\/p>\n

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Saudi Arabia has emerged as a global benchmark for economic diversification and innovation. Central to this transformative journey is the thriving of the real estate sector, playing an important role in attracting foreign investments, boosting inward tourism, and reshaping the nation\u2019s urban landscape. The article highlights the changes in the Saudi real estate market, exploring the regulatory shifts, and the opportunities it presents to investors.\u00a0<\/span>[\/vc_column_text][vc_btn title=”BOOK A FREE CONSULTATION” style=”3d” align=”center” i_align=”right” i_type=”typicons” i_icon_typicons=”typcn typcn-chevron-right” add_icon=”true” link=”url:%2Fen-sa%2Fcontact-us%2F”][vc_column_text]<\/p>\n

CORPORATE INFLUX AND SHORT-TERM RENTALS IN SAUDI ARABIA<\/span><\/h2>\n

The influx of international companies into the Saudi market; in addition to the 2024 policy mandating overseas companies to establish regional headquarters in Saudi Arabia, has elevated demand for office spaces. Corporate executives visiting the Kingdom have created a significant opportunity for the real estate market in Saudi Arabia leading to rising demand for short-term rental properties, prompting various rental and property management ventures to enter the Saudi real estate market and creating a significant opportunity for market impact. Recent analysis reflects that revenue from short-term rental services in Saudi Arabia is expected to exceed USD $600 million in 2024, propelled by the policies encouraging tourism and foreign investments, and the new bylaw approved by the Saudi Ministry of Tourism allowing citizens to rent their homes to tourists. Airbnb, HomeAway, and Vrbo are amongst the early birds to expand their presence in Saudi Arabia as the market for short-stay and short-term rental accommodations is expected to reach annual growth of 1-2 percent in the initial years, while the number of users in the vacation rental market is projected to reach 5.39 million by 2028.<\/span><\/p>\n

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OFFICE SPACE AND INDUSTRIAL GROWTH IN SAUDI ARABIA<\/span><\/h2>\n

Demand for office spaces across the Kingdom, specifically in Riyadh, has witnessed a record growth rate of 23.6% as off Q3 2023 with a substantially higher rate of 92 percent for occupiable supply. Dammam and Khobar\u2019s office market also recorded growth across all segments in Q3 2023, starting with Damman with an average rental growth of 7.5% and 9% growth rate in Khobar. In addition, the industrial and logistics sector in Riyadh has witnessed around 30 percent increase in average rents to SAR 195 per square meter. Jeddah’s industrial and logistics rents have marginally softened, while Dammam and Khobar experienced improvements of 19.8 percent and 16 percent. The substantial increase in average rents reflects somehow the shortage of such prime office spaces and units at strategic locations and the robust growth and development in these areas.\u00a0<\/span><\/p>\n

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FOREIGN INVESTMENT AND REAL ESTATE FINANCING IN SAUDI ARABIA<\/span><\/h2>\n

Taimur Khan, Head of Research \u2013 MENA at <\/span>Global Commercial Real Estate Services (CBRE) in Dubai<\/a>, anticipated that the real estate market to perform strongly driven by shortage of prime office spaces, high-quality facilities at strategic locations, and the influx of new international companies.\u00a0<\/span><\/p>\n

The Chairman of the Saudi Capital Market Authority (CMA), Mohammed Elkuwaiz, announced the intention to allow non-Saudi nationals to invest in listed companies owning real estate in Makkah and Madinah signals the rapid growth in the real estate financing sector. The CMA’s decision to opens new investment opportunities for non-Saudis in these holy cities, aligning with the broader Vision 2030.<\/span><\/p>\n

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TOURISM BOOM AND REAL ESTATE EXPANSION<\/span><\/h2>\n

Following the Covid 19 pandemic, Saudi Arabia marked a remarkable progress within the tourism industry attracting 27 million foreign tourists in 2023, while the goal is to welcome 150 million visitors by 2030. The Tourism Development Fund, with financing worth SAR 35 billion, has played a crucial role in supporting major projects aimed at developing the tourism sector, with contracts signed for the establishment of 75,000 hotel rooms, targeting for a total of 550,000 rooms by 2030 and indicating a promising and thriving real estate market in Saudi Arabia.<\/span><\/p>\n

Saudi Minister of Tourism Ahmed Al-Khateeb stated that the Saudi Arabian government aims to attract 150 million visitors by 2030: contributing SAR 750 billion to the national economy in light of the country\u2019s vision for economic diversification.\u00a0\u00a0<\/span><\/p>\n

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INVESTOR CONFIDENCE AND FUTURE OUTLOOK<\/span><\/h2>\n

The Real Estate Future Forum held in Riyadh early this year marked a strong start with agreements and memoranda of understanding (MoUs) worth more than SAR100 billion being signed during the event, underscoring investors\u2019 confidence, as further the contribution of the real estate activities to the non-oil GDP marks 12.2%.\u00a0 In addition, the Kingdom\u2019s commitment to addressing housing challenges, introducing, and activating financing products, and delivering thousands of residentials units has created a positive outlook as population is expected to highly increase, specifically by 127% in Riyadh by 2030.<\/span><\/p>\n

Such outlook fosters attraction and interest from foreign investors seeking to capitalise on the expansion and development of real estate sector in the Kingdom.\u00a0\u00a0<\/span><\/p>\n

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CONSTRUCTION BOOM AND PRIVATE SECTOR PARTICIPATION IN SAUDI ARABIA<\/span><\/h2>\n

Saudi Arabia remains the largest construction market in the Middle East, with real estate and infrastructure projects that exceed USD 1 trillion, including more than 1.3 million homes by end of 2030. Regulatory frameworks by the Saudi government focus on increasing private sector contribution in relevance to the objectives of its vision 2030. These reforms include reducing requirements for developers and expanding industrial areas, demonstrating growth strategies for the construction sector to reach 8.8% of nominal GDP by 2030.\u00a0<\/span><\/p>\n

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REAL ESTATE PREMIUM RESIDENCY IN SAUDI ARABIA<\/span><\/h2>\n

Given the exceptional opportunities in the real estate market for investors and the government\u2019s proactive measures to position Saudi Arabia as a key player in the global real estate market, Saudi Arabia recently unveiled a specialized residency initiative aimed at offering long-term residency program to individuals who invest in real estate. Foreign investment in real estate has a multiple impact, contributing in the long run to the development of infrastructure and urban projects, stimulating the construction of new residential and commercial properties, generating job opportunities, and bolstering the overall real estate sector.<\/span><\/p>\n

The eligibility criteria for the newly introduced premium residency specifically targeted to individuals who own real estate include:<\/strong><\/p>\n