Saudi Arabia offers huge business potential, say leading real estate experts

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Saudi Arabia offers huge business potential, say leading real estate experts

08 Jun 2009

Saudi Arabia presents significant investment opportunities for foreign companies, according to a recent report. The real estate sector will be further buoyed by the introduction of the new mortgage law and massive government expenditure on infrastructure projects. The Kingdom has in recent years actively encouraged foreign investment through regulatory change.

The ‘Focus On’ report, third to be published in a series by Cityscape Intelligence, contains exclusive foreign direct investment data from fDi Markets from the Financial Times as well as interviews with leading industry and regional experts.

Alan Hall, Senior Counsel with Al Tamimi & Company said: “The last decade has produced a number of very significant regulatory changes which have combined to stimulate foreign investment in the Kingdom.”

He added that at a recent G20 meeting, King Abdullah expected infrastructure expenditure for the government and oil sectors to exceed US$400 billion over the next five years. He said: “The Kingdom clearly intends to be at the forefront of the implementation of infrastructure projects of genuine significance.”

He added that it is vitally important to have adequate provisions for housing finance in order for required residential development to take place . He said: “It is crucial to have an effective housing finance regulatory structure in place to stimulate large scale investment in residential property. The mortgage laws should address these issues and unlock the huge business potential of a young population which will drive growth.”

John Harris, Country Director, Jones Lang LaSalle said affordable housing was a significant investment prospect. He said: “The big opportunity that remains is housing and particularly affordable housing. There are a lot of foreign investors looking at getting involved in this market. There are also a lot of funds being formed in Gulf countries and in Saudi Arabia; they are all establishing joint ventures with local developers but I think more construction and development expertise is going to be needed to enable these funds to develop housing with these investments.”