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Higher demand for real estate sale in UAE, KSA

Higher demand for real estate sale in UAE, KSA
Saudi Arabia is expected to see a significant growth in the SLB and BTS transactions (Photo Credit: Arabianeye-Reuters)

Abu Dhabi – Mubasher: The UAE and Saudi Arabia are seeing a surge in demand for real estate sale and leaseback (SLB) and build to suit (BTS) transactions amidst changing economic conditions, according to JLL.

Lower oil prices and weakening market sentiment softened the appetite for traditional funding sources to continue providing new capital for corporates to support their growth strategies, according to Gaurav Shivpuri, Head of Real Estate Transaction Services in MENA.

Corporations with significant real estate assets are either selling their existing assets with a SLB or are seeking real estate developer financiers to custom build their assets (BTS).

''This helps in preserving capital for either retiring expensive debt, reinvesting in the business or acquiring competitors when valuations are lower,” Shivpuri added.

The Kingdom is expected to see a significant growth in the SLB and BTS transactions, as a number of private family groups holding undeveloped land, falling under the white land tax, are keen to use such strategies.

The UAE and KSA have seen a number of real estate SLB transactions undertaken by entities such as school operator GEMS, grocer Azzizah Panda & Lulu, dairy company Safi Danone and retailer Jarir.