Jeddah residential property sector may be poised for rebound: report

Affordability issues and inadequate access to financing weighed on the demand for Jeddah residential properties. (AFP)
Updated 10 April 2019
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Jeddah residential property sector may be poised for rebound: report

  • ‘The rate of decline appears to have slowed down over the quarter, indicating the market may be headed towards the bottom of its cycle’
  • Affordability issues and inadequate access to financing weighed on the demand for Jeddah residential properties

DUBAI: The residential property segment in Jeddah could be poised for a rebound after the decline in rents and sale prices softened during the first quarter, a report from research provider JLL Mena showed.
“Residential rents and sale prices declined on an annual basis. However, the rate of decline appears to have slowed down over the quarter, indicating the market may be headed towards the bottom of its cycle,” JLL Mena said.
Affordability issues and inadequate access to financing weighed on the demand for Jeddah residential properties during the period, resulting to a 11 percent annual decline in rents for apartments and 12 percent for villas. Sale prices for apartments and villas, meanwhile, continued to soften by 8 percent and 7 percent, respectively, year-on-year.
The three months to March recorded the delivery of approximately 1,660 standalone units, bringing the aggregate supply of residential units in Jeddah to 819,000.
The first quarter saw many developers delay the delivery of their projects as demand remained subdued, JLL Mena said in the report.
Meanwhile, office rents continued to soften as vacancy rates rose due to a slowdown in commercial activity.
“In the short-to-medium term, we expect rents to continue their downward trajectory as more supply is delivered to the market. In the long-run and as business activity picks up, we can expect to see office rents regain some momentum, particularly for quality grade office buildings,” JLL Mena said.
“In terms of location, office buildings along the primary Commercial Business District areas have been and are likely to remain popular. However, emerging areas with more advanced connectivity and amenities are expected to gain prominence and achieve a premium on office rates.”
Retail rental values were steady despite the growth of e-commerce in the kingdom, while hotel occupancy rates maintained their levels as improvements to Jeddah’s infrastructure continue to ease business and religious travel, JLL Mena said.


Saudi-backed SoftBank invests $125 million in Alphabet venture to put cellphone antennas in the sky

Updated 44 min 6 sec ago
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Saudi-backed SoftBank invests $125 million in Alphabet venture to put cellphone antennas in the sky

  • SoftBank’s year-old HAPSMobile and Alphabet’s Loon separately have been trying to fly networking equipment at high altitudes
  • The goal is to provide high-speed Internet where ground-based towers are unreachable

SAN FRANCISCO, USA: A SoftBank Corp. business seeking to find a way to fly cellphone antennas high in the atmosphere to provide internet in underserved areas said on Wednesday it was investing $125 million in an Alphabet Inc spinoff working on the same problem.

SoftBank’s year-old HAPSMobile and Alphabet’s Loon, which spun out last July from the research incubator of the Google parent, separately have been trying to fly networking equipment at high altitudes to provide high-speed Internet where ground-based towers are unreachable.
Loon carries the gear with a large balloon, while HAPSMobile uses a large drone.
Despite Internet coverage gaps in rural areas or during natural disasters, mobile network operators, governments and other potential customers have yet to demonstrate much enthusiasm for buying skyborne technologies.
Also in the competition to fill the coverage gaps are several billionaire entrepreneurs, including Elon Musk, Richard Branson and Jeff Bezos. Each is backing separate early-stage ventures that want to beam Internet from satellites in near-Earth orbit.
Loon and HAPSMobile said on Wednesday that collaboration could be the key to adoption. They are discussing the possibility of using each others’ technology, standardizing their airborne and ground networking gear and joining forces in regulatory discussions, they said in a statement.
The companies described their partnership as a “long-term” tie-up of one of Japan’s top three wireless carriers and one of the world’s biggest tech companies.
“I’m confident we can accelerate the path toward the realization of utilizing the stratosphere for global networks by pooling our technologies, insights and experience,” Junichi Miyakawa, SoftBank’s chief technology officer and HAPSMobile’s chief executive, said in the statement.
“Even in this current era of coming 5G services, we cannot ignore the reality that roughly half of the world’s population is without Internet access,” Miyakawa added.
Loon has tested balloons for nearly a decade and expects to hold its first commercial trial in Kenya this year.
HAPSMobile emerged from technology developed by dronemaker AeroVironment Inc, which owns 10 percent of the SoftBank subsidiary.
Loon said it has the option to later invest $125 million in HAPSMobile.