Office space demand rises in Riyadh due to growth of start-ups

Total office stock in Saudi Arabia’s capital stood at 4.2 million square meters of gross leasable area by the end of 2018. (Getty Images)
Updated 12 February 2019
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Office space demand rises in Riyadh due to growth of start-ups

  • Economic and social initiatives and legislation have had a positive impact on the country’s real estate sector

RIYADH: Riyadh is seeing rising demand for office space that caters specifically to small businesses and startups despite a strong supply pipeline, according to a new report.
Total office stock in Saudi Arabia’s capital stood at 4.2 million square meters of gross leasable area (GLA) by the end of 2018, according to broker CBRE, with an additional 870,000 square meters expected to be delivered by 2022.
It follows a number of Government-led initiatives aimed at stimulating private-sector growth and promoting a spirit of innovation and entrepreneurship in line with Vision 2030, CBRE said.
The broker’s Market Snapshot for 2018 also highlights a growing trend for office supply as part of mixed-use development. Rents remain under pressure in the Saudi capital with both the primary and secondary office rents down by about 4 percent and 7 percent year-on-year respectively.
But increased incentives by landlords, discounts for long-term leases, and other tenant perks could help to mitigate declines in the market.
“The recent economic and social initiatives and legislation introduced by the Saudi Government have already had an extremely positive impact on the country’s real estate sector,” said Simon Townsend, head of strategic advisory at CBRE MENAT and General Manager, CBRE KSA.
“Meanwhile, the increased government spending on large-scale infrastructure and mega-projects is expected to further stimulate the overall market, with a positive trickling-down effect on all key sectors.”
The opening up of the entertainment industry in Saudi Arabia could also boost the hospitality sector, which has traditionally been driven by corporate demand in Riyadh.
However in the short term at least, CBRE expects daily rates to remain under pressure.
According to CBRE’s Market Snapshot, more than 5,000 keys are expected to be delivered to the market by 2022.
In the residential sector, CBRE estimates expected delivery of 130,000 additional units by 2022 to add to the existing inventory of about 1.25 million units.
The government wants to increase the availability of affordable housing throughout the Kingdom and has signed a number of public private partnerships to spur development.


India suspends Kashmir border trade with Pakistan

Updated 19 April 2019
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India suspends Kashmir border trade with Pakistan

  • Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries
  • India said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency”

NEW DELHI: India has suspended trade across its disputed Kashmir border with Pakistan, alleging that weapons and drugs are being smuggled across the route, as tensions simmer between the nuclear-armed neighbors.
Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries and brought the two countries to the brink of war with cross-border air strikes.
On Thursday, India’s government, which is in the middle of a tough national election, said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.”
It also said many of those trading across the Line of Control, which divides Kashmir into zones under Indian and Pakistani control, had links to militant organizations.
The home ministry said trade would be suspended until a stricter inspection mechanism is in place.
The cross-border trade is based on a barter system, with traders exchanging goods including chillies, cumin, mango and dried fruit.
It began in 2008 as a way to improve strained relations between New Delhi and Islamabad, who have fought two of their three wars over the disputed region.
The Indian Express newspaper said Friday that 35 trucks carrying fruit traveling from the Indian side of the border had been stopped after the government order.
Trade on the border has been suspended before, including in 2015, when India accused a Pakistani driver of drug trafficking.
The latest move comes after India withdrew “Most Favoured Nation Status” — covering trade links — from Pakistan after the February attack, which was claimed by the Pakistan-based Jaish-e-Mohammed Islamist group.
Islamabad has denied any involvement in the attack.
India’s Hindu nationalist Prime Minister Narendra Modi has made national security a key plank of his re-election campaign, pointing to the recent flare-up of violence as he battles the center-left opposition Congress party.
He is seeking a second term from the country’s 900 million voters in the mammoth election which kicked off on April 11 and runs till May 19. The results will be out on May 23.