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Lower oil revenues should have limited short term impact
JLL, the world's leading real estate investment and advisory firm, today has released its fourth quarter (Q4 2014) Jeddah Real Estate Overview report that assess the latest trends in the office, residential, retail and hotel sectors in Saudi Arabia's largest city.
Commenting on the Riyadh market report, Mr Jamil Ghaznawi, National Director and Country Head of JLL's KSA, said: "We have witnessed an improvement and a healthy growth among real-estate sectors in Jeddah comparing to Q4 2013. Attractive demographics, new mortgage law, religious tourism with its positive impact on the hospitality segment, and the government's vast spending on infrastructure are all strong positives for the real estate sector in Jeddah."
He added: "The Saudi economy will be negatively affected by lower oil prices due to the country's highly undiversified economy. The government's planned budget for 2015 shows a deficit for the second time in the kingdom's history, relying more on borrowing from the local financial sector. For the same reason, the current account surplus will drop in 2015 and in the foreseeable future. On the other hand, the kingdom has enough firepower (with over USD700bn in foreign reserves) to ensure its economic growth is sustained despite lower oil prices."
Sector summary highlights
Jeddah prime rental clock
This diagram illustrates where JLL estimate each prime market is within its individual rental cycle as at the end of the relevant quarter.
*Hotel clock reflects the movement of RevPAR.
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Head of KSA Offices
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