With the rise of investor interest in Saudi Arabia’s tourism industry, the Ministry of Tourism is aiming to attract new investments worth USD 58 billion by 2023, and more than SAR500 billion until 2030.

This according to Minister of Tourism, Ahmed AlKhateeb during the 2021 Budget Forum. “The Ministry of Tourism has to go a long way to boost the sector’s contribution to the national economy,” AlKhateeb said.

The country is investing heavily in its tourism sector as part of its Vision 2030 ambitions. The tourism sector contributes 4% of the total employment in Saudi Arabia and constitutes 3.5% of the total gross domestic product (GDP) in the Kingdom – with plans by the ministry to raise it to 10%.

_{Photo Credit: Saudi Arabia Ministry of Tourism website}

Authorities are preparing for a resurgence when safety is restored with a slew of digital campaigns to promote tourism post COVID-19.  

Aditi Gouri, head of strategic consulting and research at Cavendish Maxwell, said:

“In what has been a challenging year, Bahrain has suffered a dual blow from weak oil prices and the restrictions brought on by the COVID-19 pandemic. However, the kingdom has been quick to respond and has done so efficiently, announcing relief measures to help individuals and businesses tide over the health crisis and continue on the path to recovery. Further, the successful hosting of events such as the Formula 1 Grand Prix recently is testament to the resilience of the island economy which has tourism and entertainment at the heart of its diversification strategy.”

KEY MARKET INSIGHTS FROM CAVENDISH MAXWELL'S 2020 BAHRAIN PROPERTY MARKET REPORT

• Mining, financial services and manufacturing were the top three contributors to GDP growth in 2019. Between 2010 and 2019, Bahrain’s GDP increased from BHD 9.7 billion to BHD 14.5 billion at current prices, registering a compound annual growth rate (CAGR) of 4.6%.

• Similar to other global economies, Bahrain will witness a contraction in economic growth in 2020, with a rebound expected in 2021. Measures introduced by the Bahrain government to mitigate the impact of the pandemic, including a BHD 4.3 billion economic stimulus package, are expected to benefit various sectors, particularly small and medium enterprises (SMEs) and the private sector.

• Despite the volatility in oil prices and ongoing fiscal consolidation, Bahrain has continued to develop infrastructure projects with BHD 221.7 million in new tenders in H1 2020. Bahrain continues to deliver on its infrastructure plans and has approved a number of major projects.

• In general, oversupply continues to govern residential property prices and rents in Bahrain. Higher vacancy rates coupled with the completion of projects under construction are factors increasingly pressuring landlords to attract tenants.

• The trend of subdued market conditions in the office sector has extended into 2020, primarily due to an oversupply of commercial spaces amidst a protracted economic slowdown. However, certain pockets have displayed signs of recovery with rents either holding steady or declining at a slower pace. Occupancy levels are improving, albeit slightly.

• Authorities are preparing for a resurgence when safety is restored with a slew of digital campaigns to promote tourism post COVID-19. A number of hotel launches and renovations have also been planned to accommodate visitors.

• Despite being oversupplied, a number of major retail projects have either been announced or delivered recently and total approximately 300,000 sq m of combined gross leasable area. These establishments have been designed keeping in mind the need to align with the rising popularity of e-commerce versus traditional retail.

• As tourism continues to drive retail in Bahrain, the sector will naturally face headwinds whilst travel remains restricted due to COVID-19 and until normal activity resumes.

Located in the capital Riyadh, Makkah, Qassim, Asir, Jazan, Najran regions and the Eastern Province region of Saudi Arabia, these contracts are in line with the ministry's aim to provide home ownership to 70% of the Saudi families by 2030.

Makkah has the lion share with 719 plots followed by 638 in Riyadh region.

“These beneficiaries are being given the option to purchase housing units within the Ministry’s projects, or to purchase housing units developed under public private partnership (PPP) programme,” said a Sakani spokesman.

"Also, they have the option to buy ready-made housing units from the market or obtain a subsidized mortgage 100% profits for those who own land to build their homes on their own," he stated.

_{Photo Credit: Stijn te Strake on Unsplash}

Located near Dubai Marina, the Sea Palace Floating Resort in Dubai will consist of a hotel and six floating glass boat villas, each priced at AED 20 million.

According to Mohamed El Bahrawy, CEO and founder of El Bahrawy Group, the resort is a mix of a yacht and villa that includes a glass bottom. The villas have been licensed as a yacht and upon completion, the developer will apply for the approval of the project to Dubai's maritime authorities.

The villas consist of two floors, a balcony, and a roof with an outdoor swimming pool, along with four bedrooms, on the first floor, and a kitchen and living room. The project is expected to be completed soon with more than 50% of the project almost finished.

AN ECO-FRIENDLY AND LUXURIOUS DESIGN OVERLOOKING THE DUBAI SKYLINE

“I believe this type of project will create a boom in the tourism field,” Mohamed El Bahrawy, CEO and founder of El Bahrawy Group

 

_{Photo Credit: www.luxurylaunches.com}

 

EXPAND YOUR REAL ESTATE KNOWLEDGE
Subscribe to the Cityscape Intelligence newsletter here

 

Egyptian real estate developer, SODIC and Mobica, the largest office furniture manufacturer in the MENA region are partnering to offer plug and play offices and workspaces across Egypt.

The plug and play concept – all on a lease basis with no initial investment – allows clients to choose their tailored layouts and interior, making for an accessible, efficient and hassle-free experience, according to a statement.

Commenting on the collaboration Magued Sherif, SODIC’s Managing Director said: “The newly introduced office solution is one of many new innovative concepts we are rolling out to the market, in line with our customer focus approach.”

In a bid to increase investment between the UAE and the continent of Africa, the Sharjah Chamber of Commerce and Industry has signed an MoU with the Zanzibar National Chamber of Commerce, Industry & Agriculture.

Expected to strengthen trade, economic cooperation, investment relations, and expand a commercial network; the agreement will focus on opportunities between the two chambers while promoting investment and the MICE (meetings, incentives, conferences and events) market.

The MoU underscores Sharjah’s goal to increase economic and investment ties in Africa.

“The African markets are among the best-emerging markets for Emirati products, thanks to the population density of these countries and the need of these markets for high-quality products at competitive prices. The Sharjah Chamber, from this perspective, is keen to keep in touch with the African countries through dispatching annual trade missions to identify the growth opportunities available to the Chamber’s members,” said His Excellency Abdullah Sultan Al Owai, Chairman of the Sharjah Chamber of Commerce & Industry who signed the agreement virtually.

“In addition to introducing investors, businessmen, and local companies to the investment opportunities available in the African markets, the agreement will help provide support for investors and private sector in Zanzibar to boost their investments in Sharjah and to make the most of its economic qualities which made the emirate an attractive destination for investors from around the world,” Al Owais concluded.

 

Driven by a strong government commitment to develop infrastructure, promote private sector partnerships and enhance business environment, Egypt’s real estate sector has emerged as one of the region’s success stories, despite the challenges brought on by 2020, according to JLL’s 2020 Year End Real Estate Market.

“The various structural reforms launched over the past couple of years, coupled with the flexible approach to handling the pandemic by allocating 2% of the country's GDP to support the more vulnerable economic sectors and industries, mitigated the economic shock to a certain extent in a year as challenging as 2020,” said Ayman Sami, JLL’s Country Head – Egypt office.

“Amid a global pandemic and strict safety measures, the government’s commitment to enhancing transparency, promoting competitiveness and improving governance have acted as catalysts to further support the real estate sector.”

JLL summarises Egypt’s real estate sector, pointing out some bright spots and challenges in 2020.

COMMERCIAL MARKET

Cairo's commercial market saw its first office completion of 2020, with the handover of 27,000 sq m of gross leasable area (GLA) in the fourth quarter. While the slowdown in activity during the year pushed landlords in Central and West Cairo to become more flexible with lease rates and terms, prime rents in New Cairo remained relatively stable.

RESIDENTIAL MARKET

Almost 2,500 units were completed in Cairo’s residential market in 2020, bringing the total stock to around 162,000 units. An additional 26,000 units are expected to be delivered in 2021. In terms of performance, the rental market demand remained resilient, specifically towards the second half of the year, resulting in rental increases of 8% and 5% in 6^th of October and New Cairo, respectively. 

RETAIL MARKET

With the brick-and-mortar stores impacted at the start of 2020 due to lockdown measures, Cairo’s retail market saw groceries, pharmaceuticals and other entities quickly developed online platforms to support their businesses and continue engaging with consumers. This reflected positively on the logistics and warehousing sectors in Cairo and facilitated their rapid growth, outlines JLL’s report. Average asking rental rates continued to increase annually between 5% and 10% across secondary and primary malls, respectively.

HOSPITALITY MARKET

Cairo’s hotel market saw the delivery of around 400 hotel keys across the capital in 2020, bringing the stock to around 23,000 keys. Occupancy levels were registered at 28% in the year to (YT) November 2020, while average daily rates (ADR’s) and revenue per available room (RevPar’s) decreased by 17% and 69%, respectively, to record USD 79 and USD 22 over the same period.

OVERVIEW

Gabriella De La Torre, Director at CBRE in her piece on Thoughts and predictions on the UAE real estate sector in 2021, says that from a market perspective, it is clear that 2020 has accelerated a number of key trends such as the growth of e-commerce and adopting more flexible living and working arrangements.

“The outbreak of COVID-19 has triggered a shift in mentality, for both employees and employers and supported by the technological development we will not fully go back to the previous, inflexible work from office setting rather than adopting and evolving to a hybrid approach. We expect these trends to continue into 2021, highlighting the importance of delivering and providing the right type of real estate which responds to these shifts in consumer behaviour,” she says.

What about investors? What can investors expect in 2021? According to Marie Puybaraud, Director of global research at real estate advisory JLL, how investors will refocus during an economic downturn is always closely watched.

For Puybaraud, in her article 5 big questions, real estate is asking in 2021, the year ahead represents a cautious-but-confident approach, supporting demand for premium office buildings in big cities.

“There has also been a shift toward sectors that became increasingly important during the health crisis. Logistics assets, already one of the hottest sectors in recent years, are set to receive increased allocations amid the boom in online shopping. Data centres, multifamily and life sciences real estate are also increasingly in investors’ crosshairs,” she says.

After a year when investors stayed closer to home, JLL expects a rise in cross-border investment in some markets.

WHAT TO EXPECT FROM THE UAE & SAUDI ARABIA'S REAL ESTATE SECTOR IN 2021?

CBRE’s De La Torre says that she expects the UAE and Saudi Arabia to remain key focus areas in 2021.

“In the case of the UAE, the market fundamentals are looking positive, supported by the government’s quick and assured response to the pandemic as well as the range of new initiatives and reforms, which we expect to support future investment and further bolster market confidence.

In Saudi Arabia, ambitious plans for new investment and real estate development in line with Vision 2030 are also expected to support economic growth, creating various opportunities in key sectors, such as hospitality, entertainment and logistics.”

THE ROLE OF TECHNOLOGY IN REAL ESTATE

Experts remain undivided that technology’s role in real estate will only accelerate in 2021.

As technology becomes increasingly intertwined with office buildings, retail centres and warehouses, smart building tools will aid the real estate sector in understanding how safe and healthy their spaces are.

“From our perspective, data and analytics platforms are key and will continue to transform the way we operate and the way we service our clients.

As technology and big data continue to grow across the globe, more and more of our clients are interested in leveraging on the robust capabilities of PropTech across all real estate sectors,” says De La Torre.