"A large clientele of investors from Malaysia, Asia, China, Singapore and North America is interested in the Kingdom’s real estate business since Saudi Arabia is the fastest growing market in the world," Hagkull said, adding that the Kingdom’s real estate market is set to grow significantly over the next four years. He pointed out that such a global interest is due to the availability of a wide range of opportunities, as the present shortage of 500,000 houses is expected to rise to one million in 2012.
"The real estate markets are being driven by a combination of a large and growing economy and strong demographic fundamentals. The Saudi economy is by far the largest in the region and is well positioned to outperform others in the face of the current global economic downturn."
He indicated that one of the main drivers of both the economy and the real estate market is the size and rapid growth in population. "Saudi Arabia has been the world’s fastest growing large country in terms of population over the past 10 years. As a result, Saudi Arabia has a very young demographic profile with around 45 percent of the population currently aged below 20 years. This young age profile and the rapid rate of urbanization (growth of the major cities) have been the major demographic factors driving the real estate market."
Saudi Arabia has the largest real estate market in the GCC with more commercial (office, retail and residential) floor space than all of the other GCC countries combined. The current stock of commercial space is planned to increase by more than 60 percent by 2012 with the residential sector also poised for significant growth.
"The office sector is also positive with current rental growth rates in Riyadh and Jeddah remaining ahead of the majority of other GCC economic centers. The hotel sector is uniquely positioned to benefit from the forecast growth in religious tourism over the next few years. Coupled with an increase in business travel, this has led to a shortage in quality hotel room supply."
"I am thrilled at the opening of our first Saudi Arabia offices. We believe the opportunity for our business in the Kingdom is vast, with the Kingdom’s economy enjoying a higher degree of internal self-sufficiency with a sizeable domestic market, less dependence on global capital or international workforce. It also enjoys low levels of debt in both public and private sectors and 25 percent of global oil reserves," said John Harris, head of Kingdom’s operations for Jones Lang LaSalle said.
"These favorable economic conditions are matched by positive demographic drivers. Saudi Arabia is the world’s fastest growing large country with a current population in excess of 25 million, 40 percent higher than the combined population of rest of the GCC. In addition, almost 50 percent of the total population is below 20 years old and the country is also one of the world’s fastest urbanizing countries," he added.
