Riyadh property market remains subdued in Q3 as rents decline: JLL

The overall performance of Riyadh’s real estate market remained relatively subdued across the office, residential, retail, and hotel sectors as rents continue to decline in Q3, according to JLL’s Q3 Riyadh Real Estate Market Overview.

The report noted that the office market witnessed a few project completions; however, the office Gross Leasable Area (GLA) in Riyadh remained relatively unchanged.

Rents in Q3 declined by four percent on an annual basis and three percent quarter-on-quarter (QoQ) due to a general slowdown in economic conditions and business activity in Riyadh.

“A significant milestone in Q3 was the announcement that 75 percent of the Riyadh Metro project is now complete, which once open will be a game changer in facilitating business through improved infrastructure, attracting foreign investment,” said Dana Salbak, Associate, JLL MENA.

The report also revealed that overall performance in the residential sector remained unchanged compared to the previous quarter. The average rents and sale prices remained largely stable on a quarterly basis with a three percent decline on an annual basis.

On the other hand, affordable housing remains a popular subject in Riyadh as the government continues to focus on driving home ownership amongst Saudi nationals.

The report indicated that the hotel market remained relatively unchanged in Q3, but given the market’s large reliance on corporate demand, the hotel performance will remain under pressure in the short term.

As Saudi Arabia’s government is in its implementation phase of diversifying the economy, the hospitality market in the long run will cater to increased visitors as tourism remains a large focus.