New initiatives to support Saudi real estate sector

A new building being constructed in Saudi Arabia. (AN photo)
Updated 13 January 2017
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New initiatives to support Saudi real estate sector

JEDDAH: About 4,000 new residential units entered the Riyadh property market in the fourth quarter of 2016 and a further 25,000 units are expected to be built this year, according to report from JLL.
JLL is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate.
The government took several initiatives to work with the private sector in 2016 in an effort to increase housing supply in Saudi Arabia, the real estate consultancy said in its report — “2016 Year in Review.”
“The government’s major plans to energize the real estate market have resulted in a more positive outlook for 2017 in line with measures to counteract reduced government and consumer spending,” said Jamil Ghaznawi, country head of JLL, Saudi Arabia. 
 In an effort to diversify the economy and open the real estate market to smaller investors, the Capital Market Authority introduced new rules in 2016 allowing the formation of the Real Estate Investment Traded Funds (REITs) on the local stock exchange.
 “The market is optimistic that by introducing REITs, the National Transformation Program’s (NTP) goal to increase real estate contribution to GDP from 5 percent to 10 percent annually will be achieved in addition to creating more transparency in the market,” he said.
 “In addition, these funds could help provide an exit strategy for those developers seeking to create income producing assets rather than developments for sale” commented Jamil Ghaznawi.  
The report also highlights 2016 as an active year for white land tax and home financing which both have implications for the real estate market in 2017 as the changes start to come into effect. 
It said year-on-year rental values for villas and apartments in the Saudi capital fell by 4 percent during the past 12 months, but added that residential performances remained relatively stable in Q4.
In Jeddah, although there were limited notable completions in 2016, the projects which did complete were part of a growing concept of quality lifestyle developments, JLL said.
Around 4,000 units were added to the Riyadh market over the last quarter, with the first half of 2017 expected to see a number of developments enter the market which were delayed from 2016, it added.


Germany sees ‘most difficult part’ in EU-US trade talks ahead

Updated 44 min 30 sec ago
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Germany sees ‘most difficult part’ in EU-US trade talks ahead

  • ‘For some weeks and months now, we’re observing with concern that the US is tightening its trade policies, that tensions are increasing’
  • ‘The impact can already be seen in the world economy, global growth has slowed’

BERLIN: The most difficult part in trade negotiations between Europe and the United States is starting now and talks should focus on reducing tariffs on industrial goods to increase the chances of a deal, German Economy Minister Peter Altmaier said on Tuesday.
A confidential US Commerce Department report sent to President Donald Trump over the weekend is widely expected to clear the way for him to threaten tariffs of up to 25 percent on imported autos and auto parts by designating the imports a national security threat.
“For some weeks and months now, we’re observing with concern that the US is tightening its trade policies, that tensions are increasing,” Altmaier told Deutschlandfunk radio.
“The impact can already be seen in the world economy, global growth has slowed,” Altmaier said.
Asked about the risk of higher US car tariffs, Altmaier said he did not buy the argument that imported cars would threaten the national security of the United States.
Altmaier, a confidant of Chancellor Angela Merkel, said that reducing tariffs on cars and other manufactured goods should be the main focus of the ongoing trade talks.
“We are not yet where we want to be. We might have made one-third of the way and the most difficult part will be now,” Altmaier said.
Altmaier added that he was in favor of reducing import tariffs for cars to the same level in the US and Europe, “ideally to zero percent.”
The trade talks will also be high on the agenda during a meeting of Altmaier with his French counterpart Bruno Le Maire in Berlin later on Tuesday.
Both ministers are expected to narrow differences on how far the negotiation mandate of the European Commission in the talks with the US should go and which areas should be excluded.
France is reluctant to open up its agriculture sector to US imports and Altmaier said he was fine with excluding the issue in the trade talks.
“Agriculture is a very sensitive topic, so we don’t want to talk about this in the current situation,” Altmaier said.
Altmaier and Le Maire are expected to hold a news conference after the talks.
European Commission President Jean-Claude Juncker told a German newspaper that Trump had promised him he would not impose additional import tariffs on European cars for the time being.
If Trump imposed tariffs on European cars, however, the EU would react immediately and not feel obliged to stick to its promise to buy more soybeans and liquefied gas from the United States, Juncker added.