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JLL, the world's leading real estate investment and advisory firm, today has released its first report on the Eastern Province real estate market in the Kingdom of Saudi Arabia.
This initial report focuses on the two largest centres of commercial real estate within the Eastern Province, the Dammam Metropolitan Area (or DMA, which comprises Dammam, Al Khobar and Dhahran) and Jubail (one of the largest petrochemical clusters in the world). Both of these lie on Saudi Arabia's Eastern Seaboard – the Arabian Gulf coast, between Kuwait to the north and the King Fahd Causeway to Bahrain.
Unlike other Gulf States that are basing their diversification strategies away from oil production on Finance, Media or Tourism, Saudi Arabia is pursuing a different direction, based largely on downstream manufacturing and processing of the Kingdom's hydrocarbon resources.
Commenting on the Eastern Provence market report, Mr Jamil Ghaznawi, National Director and Country Head of JLL's KSA, said: "Despite the economic importance of the region and its rapid urban growth over the past 20 years of this area which is central to Saudi Arabia's economic diversification strategy, there has been relatively little research published on the real estate market in the Eastern Province.
He added: "Availability of low cost fuel and petroleum, political and government support are the major drivers of demand for industrial property in the Eastern Province. The government of Saudi Arabia is proposing to develop the Al-Uqair area of the Eastern Province as a major tourist destination with new hotels, residential, retail and extensive recreational facilities. This changing dynamic, and the growth in population, employment and investment levels in the area, is expected to increase both sale prices and rentals in some sectors of the market over the next few years."
Sector Summary Highlights
- While the Jubail hotel market is likely to remain focused on business travel, there are increasing opportunities for leisure based hotel products in beachfront locations within the DMA. There are currently few entertainment options on the Eastern Seaboard, resulting in many residents travelling to Bahrain or elsewhere in the Kingdom for leisure activities.
- The retail market is well provided for in the DMA (with two major super regional malls) but is less well developed in Jubail. The future growth of retail supply in the Eastern Seaboard is likely to be in line with increases in population and tourist arrivals.
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