Market Size of Saudi Arabia Commercial Real Estate Industry
Study Period | 2019-2028 |
Base Year For Estimation | 2022 |
Market Size (2023) | USD 20.71 Billion |
Market Size (2028) | USD 31.35 Billion |
CAGR (2023 - 2028) | 8.65 % |
Market Concentration | Low |
Major Players*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Saudi Arabia Commercial Real Estate Market Analysis
The Saudi Arabia Commercial Real Estate Market size is estimated at USD 20.71 billion in 2023, and is expected to reach USD 31.35 billion by 2028, growing at a CAGR of 8.65% during the forecast period (2023-2028).
- Saudi Arabia's real estate market has begun to show an overall improvement in business activity following a downturn caused by the COVID-19 pandemic. The government of Saudi Arabia, in response to the pandemic, is implementing various initiatives to contain the economic fallout and protect the Kingdom's economy.
- The oil sector grew 9% year-on-year, while the non-oil economy expanded by 6.2%. The continued government spending on giga-projects, coupled with increasing developments in the entertainment sector, is likely to stimulate demand in the commercial real estate market in Saudi Arabia.
- With conditions remaining soft across most of the commercial real estate sectors of the market in 2022, the hospitality industry witnessed several major development announcements. According to STR data, Saudi Arabia is leading the world in hotel supply growth.
- As part of Vision 2030, the government has also launched international tourist e-visas in Saudi Arabia to boost tourism in the country and increase global competitiveness, which is set to positively impact the Kingdom's real estate market.
- The office market, however, remained slightly under pressure across the major cities in Saudi Arabia. However, with the improving economic conditions in the country, it is expected that in the medium to long term, corporate demand will pick up as business conditions improve, owing to various new projects such as Riyadh's 176.7 km metro and Dammam's King Salman Energy Park (SPARK). In addition, increased investment opportunities and the ease of travel stimulated by the new King Abdulaziz International Airport (KAIA) are also expected to positively affect commercial real estate expansion, especially in Riyadh, as it remains the primary business center of the western region.
Saudi Arabia Commercial Real Estate Industry Segmentation
Commercial real estate (CRE) refers to non-residential property that serves to generate income. This includes shopping malls, hotels, and office spaces, among others. A complete background analysis of the Saudi Arabia Commercial Real Estate Market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact is included in the report.
The commercial real estate market in Saudi Arabia is segmented by type (offices, retail, industrial, logistics, multi-family, and hospitality) and by key cities (Riyadh, Jeddah, and Makkah). The report offers the market size and forecasts for the Saudi Arabia commercial real estate market in value (USD billion) for all the above segments.
By Type | |
Offices | |
Retail | |
Industrial | |
Logistics | |
Multi-family | |
Hospitality |
By Key Cities | |
Riyadh | |
Jeddah | |
Makkah |
Saudi Arabia Commercial Real Estate Market Size Summary
The Saudi Arabia Commercial Real Estate Market is projected to experience significant growth in the coming years. This growth is attributed to various factors, including an overall improvement in business activity following the downturn caused by the COVID-19 pandemic, increased government spending on giga-projects, and developments in the entertainment sector. Furthermore, the government's initiative to boost tourism through the launch of international tourist e-visas is expected to have a positive impact on the real estate market. The office market, however, is under slight pressure but is anticipated to improve in the medium to long term due to improving economic conditions and various new projects. The industry is witnessing a rise in the retail sector, particularly in cities like Riyadh, transforming the retail market. The growth of e-commerce has led shopping centers to shift their focus to enhance customer experiences. The demand for office spaces is also expected to increase across key cities in Saudi Arabia in the long term, with economic reforms under the National Transformation Plan (NTP) and Vision 2030 starting to take effect. The market is highly fragmented and competitive, with demand for new properties increasing due to growth in commercial activities and increased competition.
Explore MoreSaudi Arabia Commercial Real Estate Market Size - Table of Contents
-
1. MARKET INSIGHTS
-
1.1 Current Market Overview
-
1.2 Commercial Real Estate Buying Trends - Socio-economic and Demographic Insights
-
1.3 Government Initiatives and Regulatory Aspects for Commercial Real Estate Sector
-
1.4 Insights into Existing and Upcoming Projects
-
1.5 Insights into Interest Rate Regime for General Economy and Real Estate Lending
-
1.6 Insights into Rental Yields in the Commercial Real Estate Segment
-
1.7 Insights into Capital Market Penetration and REIT Presence in Commercial Real Estate
-
1.8 Insights into Public-private Partnerships in Commercial Real Estate
-
1.9 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)
-
1.10 Impact of the COVID-19 Pandemic on the Market
-
-
2. MARKET SEGMENTATION
-
2.1 By Type
-
2.1.1 Offices
-
2.1.2 Retail
-
2.1.3 Industrial
-
2.1.4 Logistics
-
2.1.5 Multi-family
-
2.1.6 Hospitality
-
-
2.2 By Key Cities
-
2.2.1 Riyadh
-
2.2.2 Jeddah
-
2.2.3 Makkah
-
-
Saudi Arabia Commercial Real Estate Market Size FAQs
How big is the Saudi Arabia Commercial Real Estate Market?
The Saudi Arabia Commercial Real Estate Market size is expected to reach USD 20.71 billion in 2023 and grow at a CAGR of 8.65% to reach USD 31.35 billion by 2028.
What is the current Saudi Arabia Commercial Real Estate Market size?
In 2023, the Saudi Arabia Commercial Real Estate Market size is expected to reach USD 20.71 billion.