Saudi Arabia, the largest country in the Middle East, is not only rich in oil but also has a booming real estate and hospitality sector. The market suffered quite a disruption because of the COVID-19 pandemic and had a cascading impact on the real estate sector due to the imposed limitations on mobility and other operations. According to a recent analysis, due to its exponential expansion, the Saudi Arabian real estate industry, which was valued at 7.69 billion dollars in 2017, is projected to reach 13.26 billion dollars by the end of 2023.
Vision 2030:
The Saudi Arabian government, to fuel its economic development and sustainable growth, has introduced the Vision 2030 plan, which anticipates reducing its dependence on oil, diversifying its economy, and boosting other sectors such as tourism, health, infrastructure, and education. With this ambitious long-term plan, the country has been undergoing rapid transformation, making it an attractive destination for investors and tourists alike.
Market trends:
The country has seen a huge surge in the commercial and industrial real estate development, especially in cities like Riyadh and Jeddah. The ease of doing business and government support have brought numerous multinational companies to establish their presence in the kingdom. According to the World Bank, the Saudi Arabian GDP saw 8.6% growth in the 3rd quarter of 2022 and is projected to grow by 2.3% in 2023. This promising growth is attributed to the flourishing real estate sector in Saudi Arabia. In recent reports, Saudi’s property management market was valued at USD 8.59 billion in 2021, with projected growth at a CAGR of 7.02% in the 2023–2027 fiscal year, achieving a market value of USD 13.26 billion by 2027.
As the Saudi government is shifting its focus towards developing the non-oil sectors as well, it has taken various initiatives as part of Vision 2030 and has allocated USD 110 billion for the growth of the hospitality sector and to ramp up its overall tourism goals for the country. With all the dedicated efforts, the kingdom’s hotel industry is experiencing steady growth in the key performance indicators. According to the latest report, Saudi Arabia’s hotel segment is projected to generate USD 2.51 billion in revenue by the end of 2023 and is expected to reach USD 3.02 billion by 2027.
These lucrative figures reflect the kingdom’s commitment towards development and economic diversification. It is also evident that huge opportunities are available in the real estate and hospitality sectors as well. Consequently, companies are eager to harness this golden opportunity and are making continuous efforts to rise. Notably, Alandalus Property Company, a Saudi joint stock company, has emerged as one of the leaders in the field of retail and hospitality industries throughout the Kingdom of Saudi Arabia. Their activities revolve mainly around the retail, shopping, and entertainment sectors with the newly inaugurated Alandalus Square, which consists of hotel, commercial, and residential projects. It started its IPO on the Saudi stock exchange in 2015 with 30% of the company shares, and today, it has a capital of more than USD 240 million. Taking into account these achievements and Alandalus Property’s resilient efforts to dominate its industry, International Business Magazine crowned Alandalus Property with two prominent titles: Best Real Estate Company Saudi Arabia 2023 and Leading Hospitality Industry Saudi Arabia 2023 (Real Estate Sector).
Blog by Madhulika Pandey
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