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Riyadh property market softens in Q2, more hotels expected in H2 – JLL

Riyadh property market softens in Q2, more hotels expected in H2 – JLL
The office sector in the Saudi capital witnessed a slight decrease in rentals

Riyadh - Mubasher: US-based JLL on Monday released its report on the real estate market in Riyadh, Saudi Arabia, for the second quarter of 2017, where it assessed the most up-to date trends in the residential, retail, office and hotels sectors.

The Saudi capital’s real estate market continued ‘to soften’ in Q2-17, while performance across all sector continued to decline, the real estate investment and advisory company said.

Some economic factors such as the decrease in oil prices have negatively impacted the real estate investment in Riyadh, as the hospitality market is still dependant on the government and institutional sectors.

“The market overall experienced a general slowdown in Q2, with the government looking to boost the hospitality and retail sectors through promising policies,” said Jamil Ghaznawi, national director and country head in JLL, KSA.

“With these crucial changes in the government, and foreign investment through trade deals signed during Trump’s historic visit, the market sentiment is likely to improve as we move into the second half of the year,” Ghaznawi added.

Riyadh’s residential sector saw “slight declines” in rentals and sale prices in Q2-17, JLL said, noting that the Saudi housing ministry had collaborated with six private sector developers to boost supply and meet growing demand for affordable housing.

The office sector in the Saudi capital witnessed a slight decrease in rentals, but also saw completions such as the Elegance tower and Ghirnata Square, which raised overall office space to 3.8 million square metres, the report showed.

Meanwhile, the Riyadh’s hotel sector saw no major openings between April and June 2017, “but the pipeline for the second half of the year remains strong with major scheduled openings inclusive of the Crowne Plaza ITCC, Centro Waha and the Fraser Suites,” according to JLL.