The performance of real estate market in Saudi capital Riyadh remained relatively subdued across all asset classes during the third quarter.
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The residential market in Saudi capital Riyadh witnessed little change during the period as average rents and sale prices remained largely stable on a quarterly basis.
JLL pointed out that the total supply of residential units had reached 1.29 million units by the third quarter, with a further 7,000 units expected over the last quarter of the year.
While the upcoming supply pipeline consists of high-end projects, the expert said it was likely to see more affordable housing project announcements, in line with the Ministry of Housing’s drive to provide accommodation for all.
On the office market scenario, JLL said it saw a few small project completions which left the total office GLA (gross leasable area) in Riyadh largely unchanged at around 4.1 million sq m.
Meanwhile, office rents declined 4 per cent on an annual basis and 3 per cent quarter-on-quarter on the back of a slowdown in economic conditions and business activity. Business activity focused on consolidation rather than expansion, which saw vacancy rates remain flat at 8 per cent, it added.
On the retail market, JLL said it saw the completion of Al-Dhahiah Center which has had little impact on total retail GLA as supply remained at approximately 2.14 million sq m.
Rental rates continued to soften as vacancy rates increased to registered 15 per cent across all mall types.
This comes at a time when the retail market remains under pressure, with landlords now looking to promote the concept of ‘Shoppertainment’ to differentiate their products and maintain footfall, said the JLL in its report.
On the hospitality market, the property expert said the activity remained subdued as no new hotel rooms were delivered over the third quarter.
Total hotel room stock in Riyadh remained unchanged at around 12,400 keys, stated the report.
Though, the occupancy rates improved slightly, the ADRs (average daily rate) and RevPars (revenue per available room) remain under pressure, it added.
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