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Riyadh office market stable as projects delayed

RIYADH, August 3, 2015

Riyadh’s office market has remained largely stable over the second quarter of 2015, partially due to further delays in the construction of many of the key projects, a report said.

The office market in the Saudi capital has seen little change in occupancies or rentals over the past year (or the past quarter), elaborated the new report Riyadh Real Estate Market Overview - Q2 2015 from JLL-Mena, a global real estate services firm.

This market is expected to soften as a result of major new completions in the long-delayed King Abdullah Financial District (KAFD) and Information Technology and Communications Complex (ITCC) projects during 2016.

The residential sales market continues to witness downward pressure as a result of the new mortgage regulations. Conversely, rental levels continue to grow as more demand shifts from the sales to the rental sector.

Retail remains one of the best performing sectors in Riyadh, as super-regional and regional mall performance continues to improve and retail spending remains strong. There is, however, a significant level of retail supply scheduled to complete in 2016 and 2017, the report said.

The hotel market shows signs of improvement as average daily rates and revenue per available rooms increase by around 2.5 per cent over the year to May. Similar to the office and retail sectors, there are major levels of new hotel supply scheduled for delivery, which could potentially increase the current room supply by almost 50 per cent over the next 18 months.

As with these other sectors, not all of this new supply is likely to complete, as the market continues to be plagued by lengthy construction delays. – TradeArabia News Service




Tags: retail | office | Riyadh | residential | property market | JLL |

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