Real estate professionals and government officials in Saudi Arabia aim to build an economy independent of oil; here is an overview of the market.

1. 5 of the ImportantWays
Real Estate IsGrowing
inSaudiArabia
Dr. Ehsan Bayat

2. 5 of the
Important
Ways Real
Estate Is
Growing in
SaudiArabia
 Real estate professionals and government leaders in Saudi Arabia,
as in many other Middle Eastern countries, are looking for ways to
strengthen the economy and offset the negative effects of the
declining oil industry.To this end, public and private organizations
have launched efforts to diversify their assets and attract
domestic and international investors.
 Vision 2030, the economic plan set forth by the Saudi government,
is the common objective around which the Kingdom has begun to
rally.The vision details three pillars of action intended to steer the
country towards a leading position in the regional economy. Real
estate is a large component of the plan, and the property market
has already begun to prosper as a result of the document’s
initiatives.
 From the introduction of forward-thinking property projects to
favorable measurements of an increasingly transparent
marketplace, here are five ways real estate is evolving in Saudi
Arabia to meet micro- and macro-economic needs:

3. Saudi real
estate gaining
the favor of
investors.
 Data from the Middle East Real Estate Barometer report show
that nearly eight in 10 investors and homebuyers eyeing real
estate opportunities in the region will likely purchase a property in
the coming year.The study also revealed a high percentage of
respondents looking to implement a more bullish real estate
investment strategy in Saudi Arabia during the same time frame.
 Supporting numbers from aYouGov study confirm strong interest
in buying or investing in the Saudi property market. Important
factors that individuals and corporations consider most important
when deciding to purchase real estate include property quality and
value, followed closely by capital appreciation and return on
investment (ROI).
 Various measures, such as a new commitment to public-private
partnerships (PPP), taken by the Saudi government, have
contributed to the heightened interest of buyers and investors.As
part of its strategy to achieve theVision 2030 goals, the
government aims to amplify real estate’s GDP contribution from 5
to 10 percent by 2020.

4. Saudi market
climbing in
transparency
ranking.
 The 2016 Global Real EstateTransparency Index (GRETI) reveals
another plausible explanation for why investment is on the rise in
Saudi Arabia. From 2014 to the time of the publication, the Saudi
market improved its position in transparency, moving up to the
“semi-transparent” category. Dubai is the only country in the
Middle East NorthAfrica region that ranks higher in transparency.
 This new label means that Saudi Arabia has advanced in real
estate activity and that investors consider it an emerging market.
Two categories exist above “semi-transparent,” leaving the nation
room to grow, and it appears that the Saudi real estate industry as
well as its business sector have upward momentum.

5. Capital
Market
Authority
creating
investment
guidelines.
 In October 2016, board leaders of the Capital Market Authority
(CMA) approved a new set of rules related to the unit trading of
Real Estate InvestmentTraded Funds (REIT) on the stock market.
Per the new rules, the public, including non-resident investors
outside of Saudi Arabia, can trade these funds, which will consist
of investments in local real estate, ranging from residential to
agricultural.
 CMA, a government organization, will appoint property
management companies over each unit in the REIT, and investors
will receive profits on at least an annual basis.The new fund is just
one of the new investment instruments being offered as the
government seeks to diversify the nation’s income channels.CMA
intends to establish a balanced portfolio that comprises as many
conceivable categories possible, not least of which is real estate.

6. Saudi
government
holding
record-setting
bond sale.
 The Saudi government is also working to boost its economy by
issuing bonds. In a recent international sale, the kingdom
generated roughly $17.5 billion USD. Much of the capital will fund
a number of real estate and infrastructure projects, including
finishing the King Abdullah Financial District, expanding airports,
and addressing the demand for affordable housing.
 The record-setting $17.5 billion USD generated in October 2016
reflects a positive sentiment toward Saudi Arabia among
international investors. Bond-selling activity, or debt issuance, has
become a trend in other parts of the Middle East, as well, with
Qatar, the UAE, and Oman each making significant offerings in
recent months.

7. Local
developers
aiming to
strengthen
investment
appeal.
 At the Jeddah Urban Development and Real Estate Investment
Event, also known as Cityscape Jeddah, some of the top real
estate companies made big announcements about their portfolios
with the intent of generating investment interest. One of the
highlights of the event was the exhibition for King Abdullah
EconomicCity, which gave investors a glimpse of the proposed
economy-transforming megacity.
 Sloanes KSA and Jabal Omar Development Company also
exhibited up-and-coming properties.Among these are a new 40-
story hotel tower and a large-scale, multiple-hotel development.