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Arabian Business
09-04-2025
- Business
- Arabian Business
Saudi property market booms with $29bn transactions as premium visas drive record foreign investment
Saudi Arabia's real estate market has recorded SAR109 billion (approximately $29 billion) in transactions so far in 2025, with the Premium Residency programme emerging as a significant catalyst for foreign investment in the property sector, industry experts told Arabian Business. The kingdom's push to diversify its economy away from oil has seen a flurry of regulatory reforms aimed at attracting international investors, with the real estate sector emerging as a key beneficiary of these policy shifts. According to data from the Ministry of Justice, cited by Imad Damrah, Managing Director at Colliers in Saudi Arabia, a total of 93,000 real estate transactions have been recorded in the kingdom in the first quarter of 2025. Saudi Arabia's General Authority for Statistic's Real Estate Price Index rose by 3.6 per cent year-on-year in Q4 2024, with commercial and residential segments both seeing strong gains, according to Damrah. This coincides with the continued enforcement of the kingdom's regional HQ mandate, which requires multinational companies to establish their Middle East headquarters in Saudi Arabia or risk losing access to lucrative government contracts. Premium Residency driving luxury market A significant driver of this growth has been the Saudi Premium Residency programme, which by late 2024 had attracted more than 1,200 international investors, according to information from the Minister of Investment shared by Damrah. The programme, which offers various tiers of long-term residency rights, includes a 'Real Estate Owner Residency' category that permits holders to own freehold or usufruct interests in residential property valued at a minimum of SAR4 million (approximately $1.07 million). 'Developers are launching high-end residential offerings with pricing above the minimum price threshold of SAR4 million for premium residency, in anticipation of demand from globally mobile, high-net-worth individuals,' Damrah noted, adding that the programme is already 'shaping buyer demographics, particularly in Riyadh and Jeddah.' Khaled Zowayed, a Partner at law firm Baker Mckenzie, confirmed that the programme offers substantial property rights to foreign investors. 'For Makkah and Madinah, no freehold ownership is permitted even with the residency, but 99-year usufructs are permitted,' he explained. Regulatory changes open holy cities to investment One of the most significant recent policy shifts has been the relaxation of rules governing foreign investment in companies that own real estate in the holy cities of Makkah and Madinah. 'A Royal Decree dated 17/9/1442 (corresponding to 29/04/2021) amended part of the Foreign Ownership of Real Estate Law to specifically exclude listed companies from the definition of Non-Saudi, subject to guidelines to be issued by the Capital Market Authority,' Zowayed said. Following the issuance of these guidelines, foreigners are now permitted to own shares in listed companies that own real estate in Makkah and Madinah, although foreign ownership is restricted to up to 49 per cent of any listed company. Damrah described the sentiment around this policy shift as 'optimistic,' noting that as 'pilgrimage numbers in these cities continue to rise over the long term, this growth creates more opportunities for investment in hospitality and retail development.' Despite the strong growth, the Saudi government is implementing measures to ensure sustainable development in the sector. Damrah noted that authorities are 'taking steps to stabilise growth through land supply expansion, white land taxes and the possibility of implementing lease caps.' These initiatives, he said, 'aim to foster sustainable, long-term growth in the real estate sector while safeguarding consumers from the effects of escalating prices.' Pathways to foreign ownership in Saudi Arabia Zowayed pointed out that there are numerous existing avenues for foreign investment in Saudi real estate, including: Foreign licensed businesses owning their place of business Residents owning their private residences Investment and development of real estate worth at least SAR30 million (land & construction) provided the investment is completed within 5 years Investing in a Capital Market Authority-licensed real estate fund that owns real estate Investing in a Tadawul-listed company that owns real estate Special privilege iqama holders owning property worth at least SAR4 million GCC nationals, who are not considered foreigners under Saudi law, generally being permitted to own real estate, except in Makkah and Madinah Market opportunities and future outlook Both experts highlighted significant opportunities in specific market segments. Damrah pointed to 'strong potential in the mid-income executive housing segment, which remains relatively untapped compared to the abundance of luxury or subsidised affordable housing from government projects.' He also noted similar opportunities in the office market, 'where premium spaces dominate, yet demand from SMEs for quality, cost-effective options continues to grow.' The hospitality sector was identified as particularly promising, especially with upcoming mega-events. 'Hospitality is a promising sector, especially with the upcoming Expo 2030 and World Cup 2034,' Damrah said. He emphasised that a critical strength of the Saudi real estate market is its 'strong organic demand, driven by population growth and shifting demographics,' which adds 'resilience and long-term stability, making the market less susceptible to global volatility.' Mega-events FIFA 2034, Expo 2030 boosting investor confidence Saudi Arabia's securing of major global events has significantly boosted investor confidence in the real estate sector. 'Global visibility is rising with the Kingdom securing major global events such as the FIFA World Cup 2034, Expo 2030 and the Asian Games 2034,' Damrah noted. These events, combined with progress on innovative giga-projects like Qiddiyah and a surge in tourism, are driving demand across multiple real estate sectors, including hospitality, retail, and residential. For investors looking to enter the market, Damrah advised focusing on 'identifying underserved segments such as SME-grade office spaces or mid-income housing and aligning with long-term macro trends shaping the Kingdom's evolving urban landscape.' As Saudi Arabia continues its economic transformation under Vision 2030, the real estate sector appears poised for continued growth, with foreign investment playing an increasingly important role in this development.
Asharq Al-Awsat
19-03-2025
- Business
- Asharq Al-Awsat
Investment Fund Launched to Develop Sumou Suburb Project in Makkah
AlBalad AlAmeen for Development and Urban Regeneration Co., the investment arm of the Municipality of Makkah, has signed a memorandum of understanding (MoU) with Sumou Holding Co. to launch a SAR4 billion ($1,06 billion) investment fund. The fund will finance the superstructure development of the Sumou Suburb project in Makkah to meet the needs of residents and visitors. It is part of a broader vision to create an integrated, vibrant environment that supports Makkah's ambition to become a global urban hub. AlBalad AlAmeen signed a separate MoU with Sumou Holding to develop two residential real estate projects in Makkah. The projects will span over 7 million square meters.
Zawya
19-03-2025
- Business
- Zawya
Saudi SAL, Sela in deal to set up $1bln Falcons City logistics zone
SAL Saudi Logistics Services Company has announced that it has signed an agreement with Sela Company to launch a new logistics zone at an investment of SAR4 billion ($1.1 billion) within the Falcons City project north of Riyadh. Spanning over 1.5 million sq m area, the facility will feature high-quality, Category A warehouses and storage spaces designed to meet diverse requirements, said a statement from SAL Saudi Logistics Services Company. The initiative aligns with their joint efforts to enhance strategic partnerships, support the logistics sector, and boost the kingdom's position as a global logistics hub in line with Saudi Vision 2030 and the National Transport and Logistics Strategy, it stated. The agreement was signed by SAL CEO Omar bin Talal Hariri and Sela Managing Director Rakan Al Harthy at a key ceremony held in the presence of Minister of Investment Khalid Al Falih and Minister of Transport and Logistic Services Saleh Al Jasser. It was also attended by General Authority of Civil Aviation President Abdulaziz Al Duailej, Saudi Falcons Club CEO Talal bin Abdulaziz Al Shamaisi, and several other senior officials, investors, and business leaders. Falcon City, for which the agreement was inked, enhances the appeal of the Malham area north of Riyadh. Home to the Saudi Falcons Club, one of the region's most prominent cultural and heritage landmarks, the area has contributed to tourism and cultural activities through its programs, events, and international initiatives. This integration of economic projects with heritage activities attracts visitors and investors while reinforcing the area's status as a comprehensive destination that blends a modern economy with the preservation of Saudi Arabia's cultural heritage, it stated. On the new logistics zone, Hariri said it will significantly enhance the company's capabilities due to its strategic location near King Khalid International Airport, major highways, and rail networks connecting various regions of the kingdom. "This will solidify its position as a comprehensive hub for shipping and distribution operations, further supporting Saudi Arabia's role as a key global trade center," he noted. According to him, the SAR4-billion investment in developing a model logistics zone aligns with SAL's strategic plan to enhance its leadership as a national logistics provider that adheres to the highest global standards. "The key facility will boast high-quality Category A warehouses and storage spaces for diverse requirements," he stated. Falcons City represents an advanced model of integrated cities, spanning 14.4 million sq m in the Malham area north of Riyadh. Its strategic location ensures easy accessibility and includes key facilities such as the Riyadh Exhibition and Convention Center, a state-of-the-art logistics zone attracting major global companies, an aviation runway, and an aircraft maintenance area, all of which enhance air transport and cargo efficiency. The project also features economic, commercial, residential, hospitality, and entertainment zones, along with an outlet mall to meet the aspirations of investors, residents, and visitors, he added.- TradeArabia News Service Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Trade Arabia
18-03-2025
- Business
- Trade Arabia
Saudi SAL, Sela in deal to set up $1bn Falcons City logistics zone
SAL Saudi Logistics Services Company has announced that it has signed an agreement with Sela Company to launch a new logistics zone at an investment of SAR4 billion ($1.1 billion) within the Falcons City project north of Riyadh. Spanning over 1.5 million sq m area, the facility will feature high-quality, Category A warehouses and storage spaces designed to meet diverse requirements, said a statement from SAL Saudi Logistics Services Company. The initiative aligns with their joint efforts to enhance strategic partnerships, support the logistics sector, and boost the kingdom's position as a global logistics hub in line with Saudi Vision 2030 and the National Transport and Logistics Strategy, it stated. The agreement was signed by SAL CEO Omar bin Talal Hariri and Sela Managing Director Rakan Al Harthy at a key ceremony held in the presence of Minister of Investment Khalid Al Falih and Minister of Transport and Logistic Services Saleh Al Jasser. It was also attended by General Authority of Civil Aviation President Abdulaziz Al Duailej, Saudi Falcons Club CEO Talal bin Abdulaziz Al Shamaisi, and several other senior officials, investors, and business leaders. Falcon City, for which the agreement was inked, enhances the appeal of the Malham area north of Riyadh. Home to the Saudi Falcons Club, one of the region's most prominent cultural and heritage landmarks, the area has contributed to tourism and cultural activities through its programs, events, and international initiatives. This integration of economic projects with heritage activities attracts visitors and investors while reinforcing the area's status as a comprehensive destination that blends a modern economy with the preservation of Saudi Arabia's cultural heritage, it stated. On the new logistics zone, Hariri said it will significantly enhance the company's capabilities due to its strategic location near King Khalid International Airport, major highways, and rail networks connecting various regions of the kingdom. "This will solidify its position as a comprehensive hub for shipping and distribution operations, further supporting Saudi Arabia's role as a key global trade center," he noted. According to him, the SAR4-billion investment in developing a model logistics zone aligns with SAL's strategic plan to enhance its leadership as a national logistics provider that adheres to the highest global standards. "The key facility will boast high-quality Category A warehouses and storage spaces for diverse requirements," he stated. Falcons City represents an advanced model of integrated cities, spanning 14.4 million sq m in the Malham area north of Riyadh. Its strategic location ensures easy accessibility and includes key facilities such as the Riyadh Exhibition and Convention Center, a state-of-the-art logistics zone attracting major global companies, an aviation runway, and an aircraft maintenance area, all of which enhance air transport and cargo efficiency.
Zawya
28-02-2025
- Business
- Zawya
Investment fuels growth across Saudi real estate sectors
Saudi Arabia's residential market is expected to experience significant growth over the next few years, driven by a strong economic foundation, rapidly growing population, positive demographics, and increasing demand for new homes, particularly in Riyadh, Jeddah, and Dammam, according to CBRE Middle East, the global leader in commercial real estate. This demand is driving prices and rental rates higher, a trend that is expected to continue, with the value of new residential mortgages in the Kingdom rising 17% year-on-year in 2024, satted CBRE in its latest edition of the Saudi Arabia Real Estate Market Review for Q4 2024. The strong market growth is reflected in rising property values in Riyadh, with average prices increasing by over 6% in the past year, it added. As new, high-quality units enter the market, prices are anticipated to continue to rise in 2025. In Riyadh, the villa market has seen steady growth, with average prices now approaching SAR6,000 per sq m. In Jeddah, apartment values are slightly lower, averaging approximately SAR4,000 per sq m, while villa values are notably higher, reaching nearly SAR5,700 per sq m, it added. On the office sector, CBRE said the demand for space remained strong through year-end 2024 in the Saudi capital, though transactional activity is now clearly being constrained by the lack of space for immediate lease and occupation. The high occupancy rates across the capital's prime office districts reflect the strong prevailing demand, driven by the kingdom's thriving non-oil economy which is a key component of the government's Vision 2030 diversification strategy, it stated. In the 12 months to Q4 2024, occupancies have remained close to capacity and rental rates have also continued to move upwards, it added. Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
