A surge in the number of infrastructure development projects taking place across Saudi Arabia has boosted confidence in the country’s commercial property market, Jones Lang LaSalle (JLL) claims.
In a report released this week, the real estate firm also says that Saudi Arabia’s biggest cities are likely to see dramatic growth in commercial demand over the next few years as optimism increases and access to funding becomes easier.
The head of JLL’s Saudi office, Jamil Ghaznawi, believes that recent changes to the country’s lending rules will have a significant impact on both the commercial and residential markets. He was quoted by saudibulletin.com as saying: “With the Saudi Arabian Monetary Agency (SAMA) issuing licences to allow leading banks to offer real estate financing, we expect improved access to home ownership in the Kingdom.”
In terms of activity across both sides of the market, Riyadh was the country’s top performer last year and JLL expects this to continue. In 2013, real estate acquisitions in the capital city reached a total value of $26.5 billion, according to constructionweekonline.com.
Despite the fact that demand for space in the city is on the rise, the report’s authors say that prime office rents remained largely unchanged throughout the first half of 2014 and rents for secondary buildings have even fallen slightly.
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