Saudi Arabia’s real estate market could boom over the next ten years, with investors drawn to the Kingdom by the government’s multimillion dollar economic projects, such as NEOM, a real estate expert told Al Arabiya English on Tuesday.
The country is bidding to reinvent its economy with its Vision2030 plan to stop the country becoming dependent on income from oil revenues, by plowing money into other avenues such as the esports and video gaming industry, as well as the creation of futuristic city NEOM.
In turn this could help increase the value of the country’s real estate market and could lead to property investors to flock to the country.
“Investors who want to buy real estate understand that if someone committed to invest [that much] in the country it's going to be growing,” Alex Galtsev, CEO of Dubai-based property technology company Realiste told Al Arabiya English.
“Saudi has a lot of potential for the next ten years … and the next ten years is going to be the greatest time for [the] Saudi property market,” he added.
In a sign that the country is already attracting investors Investcorp Holdings, one of the largest asset managers in the Middle East, plans to invest as much as $1 billion in Saudi real estate over the next five years, the company said on Tuesday.
The Bahrain-based investor, which manages over $40 billion in assets, has already acquired a logistics warehouse in Dammam in the east of the kingdom, and has identified a further $100 million in potential deals, it said in a statement.
"If you can invest in Riyadh for example, buy 10, 20, apartments and leave it for five years, you can come back and it will have grown 100, 200, percent,” said Galtsev, predicting the increasing size of the Kingdom’s property prices.
Since first announcing plans for futuristic NEOM in 2017, the Saudi Arabian government has announced millions more dollars of investment in the project.
Saudi Arabia’s Crown Prince Mohammed bin Salman, and Chairman of the Board of Directors of NEOM, announced in June the launch of $500 million “THE LINE” project in the city of NEOM. This is an urban community set to run on 100 percent renewable energy and span a distance of 34 square kilometers.
In one of a number of investments in gaming and e-sports Saudi Arabia is also set to invest 142 billion riyals ($38 billion) in gaming companies through state-owned company Savvy Games Group, state press agency SPA reported in September.
Revenue from the global gaming industry is expected to top $200 billion in 2022, according to a review of more than 140 publicly-listed game companies by market analyst Newzoo.
Dubai currently leading the market
But despite Saudi Arabia’s promising potential real estate developments the UAE’s Dubai is currently the real estate hotspot, not just in the region, but also in the world, with rents in the country increasing so much they are outstripping salaries.
“This year is going be the best year for Dubai,” said Galtsev. “Dubai is in its greatest time in history for real estate investing.”