KSA to focus on business environment & attracting FDI – says JLL

21 February 2019

Increased government spending and major project launches to stimulate the real estate market in Saudi Arabia.

Government spending and progress on mega-projects are expected to provide a catalyst for future investment opportunities in Saudi Arabia, outlines JLL's 2018 Year in Review report.

“The government's continued focus on strengthening the business environment and
attracting foreign investment should have a positive impact on the real estate
sector in the long run,” said Dana Salbak, Associate, JLL MENA.

JLL maintains that 2019 is expected to witness ongoing activity on the back of the Kingdom's largest ever expansionary budget (SAR 1 trillion in spending), and commitment to driving economic growth in line with Vision 2030's objectives.

“With conditions remaining soft across most sectors of the market in 2018, the hospitality and entertainment industries witnessed several major development announcements. These included the launch of Al Qiddiya in Riyadh and Amaala, the luxury wellness destination forming part of a giga-projects investment portfolio
launched by The Public Investment Fund (PIF),” reads the JLL press release.

“These milestone projects are key drivers of Saudi Arabia's non-oil economic growth and are expected to trigger other large-scale real estate development activity. In addition, the wave of development across the Kingdom and other reforms promoting Saudization are expected to create a surge of job opportunities in the long run,” Salbak added.  

The inauguration of the King Salman Energy Park (Spark) in 2018 is another milestone project expected to fuel demand for commercial and industrial real estate in the Eastern Province - with an expected GDP contribution of SAR 22 billion by 2035, according to JLL. While KSA’s potential to transform into a global transport hub has led to the development of major infrastructure projects focused on connecting cities.

“The market dynamics in Saudi Arabia have seen a major shift in the last year, with significant government investment and new reforms expected to have a positive long-term impact on the Kingdom's real estate market,” said Thierry Delvaux, CEO, JLL MEA.