JEDDAH, 27 December 2004 — Saudi Arabia’s real estate sector seems to be the major beneficiary in the current investment activity generated by the high liquidity of cash caused by the repatriation of funds invested overseas.

This was the impression carried by many delegates attending the three-day conference and two-day workshop that were run alongside the five-day exhibition on real estate development and investment held in Jeddah last week.

With the Kingdom slated to join the World Trade Organization, the conference discussed at great length its future impact on the real estate development and investment in particular. Eminent professors from King Abdul Aziz University and experts from the real estate sector, as well as businessmen and investors deliberated on the challenges facing the industry and proposed various measures that would help improve the sector.

Dr. Fahd Y. Aleatany, professor of international business and economy at King Abdul Aziz University and chairman of the exhibition organizing committee, explained how the General Agreement on Trade and Services (GATS), which is part of the WTO agreements, would affect the real estate industry.

“The GATS will impact the industry both positively and negatives,” he said. The positive effect will be seen when the Kingdom becomes a full member of the WTO. It will raise the standard of quality and also the qualification required for all those who deal in real estate industry. The quality of services will consequently increase and lot of new opportunities will be created for the development of real estate, as well as jobs for the aspiring Saudis.

“In order to succeed and compete efficiently in real estate under the umbrella of WTO, especially GATS, we’ll have to work on both the government and private sector sides,” Aleatany said.

Various speakers suggested that the government should set up a higher authority for real estate similar to the ones that have been created for certain financial and other sectors. “It should be a higher authority and not a committee,” Aleatany emphasized.

He also recommended that the existing real estate laws should be reviewed and modified to meet the WTO requirements, if necessary. “In fact, there should be a continuous review of such laws over a period of time to suit our interests,” he said.

Overseas investments are already coming into the Kingdom’s various sectors of industry. “The flow of investments can increase a great deal, but that will depend on the kind of terms we agree with the WTO,” he said. However, the real estate sector, which is currently witnessing a boom, stands to benefit a great deal from the increased flow of foreign investments, he added. Even in the days when the economy had slowed down, the real estate sector remained active, although with a slower pace. E-government was one other requirement that was emphasized if the Kingdom had to make all-round rapid strides. This will entail e-ministries that will offer various services on their websites making things easy for the business community, investors and the general public.

“One way of further expanding the current activity in the real estate sector is to review various steps, and make it more competitive and lucrative for the investors,” Aleatany said. The real estate sector represents 75 small companies, but with the prospects of the Kingdom’s WTO membership, they will not be able to function independently and so will have to merge among themselves in a bid to create a bigger entity to face the various challenges and risks. “They will have to merge into big companies,” Aleatany said and gave the example of the financial sector in this regard. “We call this a moment of integration and strongly recommend this to happen, especially in the interest of small entities,” he added. The outlook of smaller companies should be to focus on and compete in services and take a leaf from big international companies who work with strategic planning. They also need to establish a total quality management program in whatever project they undertake. The ever-expanding real estate sector calls for a regular academic program so that the sector can get the right investors and professionals.

Susan Murshid, who was among those addressing the women’s workshop of the conference, said such a move was urgently needed and should be considered, especially when women have started getting a bigger say in the male-dominated real estate industry.

“We’re going to address the need for the introduction of an academic program for real estate to the Education Ministry,” said Murshid who teaches at the College of Business Administration. Such a program, she said, could produce qualified Saudis to occupy positions in the growing real estate industry. They can become investors, engineers, developers and builders, as well as professionals to take charge of the service industry. However, the academic program should be so designed as to play a role in real estate management. They can even apply for licenses and serve the industry in various capacities. “I want my institution to set up an academy and be the pioneer in this program,” she said.

Architect Anas Saleh Serafi, director general of Abnia Design Consultants and Serafi megamall, listed various steps that can help a person realize his dream of owning a house.