Riyadh led Saudi Arabia residential market boom in Q2: Knight Frank

Riyadh led Saudi Arabia residential market boom in Q2: Knight Frank
155,000 new homes are scheduled for completion in Saudi Arabia before the end of 2023, of which 100,000 will be in Riyadh. (AFP)
Short Url
Updated 09 August 2021

Riyadh led Saudi Arabia residential market boom in Q2: Knight Frank

Riyadh led Saudi Arabia residential market boom in Q2: Knight Frank
  • Residential transactions in Riyadh rose by 77 percent from a year ago
  • Apartment values in the capital grew 7.6 percent last year

RIYADH: The Saudi capital led the residential market boom in Saudi Arabia in the second quarter of this year, according to a report from Knight Frank.

The number of residential transactions in Riyadh went up by 77 percent from a year ago, while the number of homes sold in the Red Sea coastal city of Jeddah rose by 44 percent, the report said.

“The post-Covid recovery was never going to be smooth sailing, but we are seeing sustained growth in certain segments of the market,” said Faisal Durrani, partner and head of Middle East research at Knight Frank. “In the residential market for instance, the government’s various initiatives, such as Sakani and Wafi are continuing to contribute to an acceleration in home ownership rates across the Kingdom.”

Government initiatives are supporting the residential market with 155,000 new homes scheduled to complete before the end of 2023 across Riyadh, Jeddah and Dammam Metropolitan Area, 100,000 of which are in Riyadh alone, the report said.

Apartment values in the capital grew by 7.6 percent last year, the fastest pace since at least 2017, it said. However, rental rates have continued to decline outside of Riyadh as demand remains muted.

OFFICE MARKET
The Riyadh office is market is facing similar pressures to the rest of the world as tenants look to “rightsize” following the pandemic, Durrani said. While Grade A office rents are being supported in Riyadh by demand from public and quasi-public sector entities, growing new supply “is quickly emerging as an area of concern,” he said.

Knight Frank has identified almost 1.8 million square meters set for completion by the end of 2023, 56 percent of which is planned for Riyadh.

“It’s likely that Grade B buildings will feel the greatest downward pressure on rents as the flight to quality intensifies, particularly in cities like Riyadh and Jeddah, which will see a 25 percent and 36 percent increase in total office supply in the next three years,” Durrani said.

Knight Frank expects total office stock in Riyadh and Jeddah to reach 5.3m sqm and 1.8m sqm by the end of 2023.

RETAIL RENTS
Rents in shopping malls have suffered amid restrictions in travel. Lease rates in prime shopping malls across the Kingdom fell between 1 percent and 5 percent over the last 18 months, according to Knight Frank. During the second quarter alone, rents in the Kingdom’s best shopping malls declined by between 1.5-3 percent in Riyadh, Jeddah and DMA.

“The reopening of the border to tourists from 49 nations this week, combined with ‘revenge spending’ from surging domestic tourism may help to cushion the market from further sharp declines,” Durrani said.


Saudi developer Al Akaria settles $142m loan with Riyad Bank

Saudi developer Al Akaria settles $142m loan with Riyad Bank
Updated 10 sec ago

Saudi developer Al Akaria settles $142m loan with Riyad Bank

Saudi developer Al Akaria settles $142m loan with Riyad Bank

RIYADH: Saudi Real Estate Co., also known as Al Akaria, said that it made an early payment to settle the remaining balance of its SR535 million ($142 million) loan with Riyad Bank.

This came as part of the developer's plan to reduce lending and financing costs, the company reported in a bourse filing. 

This will boost the financial solvency of the company and enhance its financial position, it added.


UAE producing near to its maximum oil production capacity: Energy minister

UAE producing near to its maximum oil production capacity: Energy minister
Updated 27 June 2022

UAE producing near to its maximum oil production capacity: Energy minister

UAE producing near to its maximum oil production capacity: Energy minister

ABU DHABI: The UAE is producing near to its maximum oil production capacity based on its current OPEC+ production baseline, Emirates News Agency (WAM) reported on Monday.

“In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline (3,168 mbopd) which UAE is committed by until the end of the agreement,” Suhail bin Mohammed Al-Mazrouei, Emirati Minister of Energy and Infrastructure, said.

 


NEOM awards London-based Keller major piling contract for ‘The Line’

NEOM awards London-based Keller major piling contract for ‘The Line’
Updated 27 June 2022

NEOM awards London-based Keller major piling contract for ‘The Line’

NEOM awards London-based Keller major piling contract for ‘The Line’

RIYADH: Saudi Arabia’s $500-billion project NEOM has awarded UK’s Keller a major piling contract for “The Line,” a 170-km megacity being developed within the Kingdom’s flagship project. 

Starting in the west at the Gulf of Aqaba and terminating at the NEOM International Airport within the upper valley region, The Line is subdivided into around 135 modules, according to a statement. 

Each module contains eight buildings founded on large diameter bored piles. 

Keller had signed an umbrella framework agreement with respect to the project, and is mobilizing for an anticipated first works order on a portion of Module 40 which has an expected value to Keller of around £50 million ($61.5 million), with the work anticipated to be completed within the next 12 months.

Listed on the London Stock Exchange, Keller is an independent geotechnical solutions specialist.


NEOM, McLaren Racing partner to drive innovation in electric motorsport

NEOM, McLaren Racing partner to drive innovation in electric motorsport
Updated 27 June 2022

NEOM, McLaren Racing partner to drive innovation in electric motorsport

NEOM, McLaren Racing partner to drive innovation in electric motorsport

RIYADH: NEOM, one of Saudi Arabia’s flagship projects, has partnered with McLaren Racing to drive innovation and talent development in electric motorsport, according to a statement. 

With the partnership, NEOM becomes the title partner of the McLaren Formula E and Extreme E racing teams, which brings the two electric race series together under the banner of NEOM McLaren Electric Racing.

“Our partnership with McLaren Racing complements NEOM’s commitment to driving sustainable solutions and tackling some of society's most pressing challenges,” CEO Nadhmi Al-Nasr said. 

“The partnership will allow us to share our collective resources and experience to yield exciting results, not only for our own organizations, but also for the broader automotive and sports industries,” he added. 

McLaren will be located within OXAGON’s Research and Innovation Campus, which will provide cutting edge facilities and collaboration spaces. 

During 2023, McLaren and NEOM will create a bespoke program to nurture engineers and students, in line with the mega project’s commitment to develop Saudi talent. 


Thailand to seek fertilizer supply from Saudi producers

Thailand to seek fertilizer supply from Saudi producers
Updated 27 June 2022

Thailand to seek fertilizer supply from Saudi producers

Thailand to seek fertilizer supply from Saudi producers

RIYADH: Thailand is planning to negotiate with Saudi Arabia for the supply of fertilizers as the country is currently facing a shortage, especially due to the high cost of imports.

The Thai Chamber of Commerce will coordinate with Saudi suppliers and a business event is to be held between three major Saudi-based fertilizer suppliers and Thai importers on June 29, Thai local media reported citing Commerce Minister Jurin Laksanawisit.

Laksanawisit added that two Saudi suppliers were recently provided permission to sell fertilizers to Thailand.

Thailand heavily relies on imports for its fertilizers, with only 8 percent coming from domestic sources and a usage of about 5 million tons of fertilizer a year, according to the minister.

The country’s overall demand for fertilizer from Saudi Arabia is about 808,000 tons, the media report noted citing industry statistics.