Saudi infrastructure projects changing property market landscape

With the Kingdom’s massive $80 billion investment in infrastructure initiatives — including new seaports, airports, railways and train stations, metro systems, and bus and road systems — new real estate opportunities have been created in the market promising to change the property market landscape in the Kingdom. To gain better understanding of the changing requirements and new driving forces in the Saudi real estate market, real estate professionals from the Kingdom and around the world will gather at the Riyadh Real Estate Summit, part of Cityscape Riyadh, taking place from Dec.10-12. Commenting on the exhibition, Abdullah bin Mahfouz, chairman, National Exhibitions Company, said: “Now in its 4th year, the Riyadh Real Estate Summit has become an integral part of the Riyadh Urban Development and Real Estate Investment Event — Cityscape Riyadh and this year the interest of local, regional and international real estate professionals is at a its height because of the vast amounts being invested in real estate projects by the Kingdom’s government as well as the private sector. “For this reason, day one of the summit will focus on the incredible expansion of the Saudi capital. Following the opening address, Envisioning Riyadh in 2030 and much sooner, delegates will discuss the driving forces that are evolving Riyadh and the greater region, looking at how infrastructure initiatives, including the new transportation systems, satellite cities and planned facilities, will dramatically change Riyadh’s landscape and affect property prices and the cost of suitable land plots.” Next will be a presentation by Youcef Betraoui, CEO, Land Sterling, Saudi Arabia, who will shed light on the new real estate opportunities created by the Kingdom’s infrastructure initiatives. “The benefits of infrastructure development are undeniable,” said Betraoui. “For instance, Dubai’s property sector owes its double digit growth to the ever developing infrastructure and it is now reaping the fruits of those early initiatives that seemed unviable five years ago due to the huge outlays.” He added: “In terms of data, SR65 billion has been earmarked by Saudi Arabia for the infrastructure and transport sector, up 16 percent over 2012. This includes SR30 billion related to the development of 3,700 km of roads, modernization of existing ports, construction of regional and international airports and berths as well as other infrastructure projects, sowing the seeds for a flourishing property market. New infrastructure investment acts as a catalyst for new property development. For example, the Riyadh Metro will require feeder bus services and improvements in the current road network to enhance connectivity. Retail and commercial operations will get a huge boost with improved consumer access, while new property developments will push the government to invest heavily in electricity, water and telecommunications.” Day one will further discuss the new urbanism in Saudi Arabia and horizontal strain covering rethinking a city’s layout to mitigate strain on municipal resources. Real-time project management for greater efficiencies and accountability, and Risk management for large scale development of Saudi Arabia are also important topics that will be covered during the summit. Day one will conclude with the head of Saudi Equity Research, HSBC Saudi Arabia, KSA, speaking on the subject of investment returns for real estate in Saudi Arabia, among types and compared regionally. Recent issues facing the real estate market in Saudi Arabia will be one of the main topics of discussion on day two of the Riyadh Real Estate Summit. Experts speaking at the summit will look for short- and long-term solutions that real estate developers and the construction industry should have in place to guarantee availability of adequate manpower for future projects. The annual Riyadh Real Estate Summit is the most powerful meeting of real estate professionals covering the hottest topics and is the key networking event for developers, government officials, investors and financiers shaping the real estate industry in the capital city of the Kingdom. Event Sponsors at this year’s show include Tadawul Holding, principal sponsor; Barwa Real Estate Group, founding sponsor; Knowledge Economic City, inaugural sponsor; and Mohammed Al Habib Real Estate Company and Flash Properties, both gold sponsors. The Saudi real estate market is driven by good demographic fundamentals, with a large local population, and a growing middle class. This has caused increasing unfulfilled demand in the residential sector as Saudi Arabia is currently facing a shortage of housing. According to NCB Capital, the Kingdom will require an additional 973,000 housing units by 2015 and needs to build 300,000 units every year from 2013-2028. The Ministry of Housing has announced many projects across the Kingdom and recently appointed a contractor to build 7,000 new residential units on Othman bin Affan street, northwest of King Khaled International Airport in Riyadh. The project will include 24 mosques, schools and other supporting facilities. This is one of many projects undertaken by the ministry across the Kingdom to address the acute housing shortage. Historically, Saudi Arabia’s economic performance is ranked among the best in the G20, mainly driven by high oil prices, which strongly contribute to government revenues, enabling the world’s largest oil exporter to carry out massive fiscal spending to fuel private consumption and create jobs. Driven by efforts to diversify away from oil, the government continues to channel oil proceeds into public capital spending on massive infrastructure, power and housing projects, which will provide a boost to the Kingdom’s construction, real estate, transport and utility sectors. Source: Arab News