26/05/2015 01:20 AST
A real estate investment specialist has confirmed that the fundamentals of the local economy “indicate renewed high levels of confidence among a wide spectrum of capital investors, despite international and regional events which had been expected to dampen enthusiasm and reduce the attractiveness of the investment environment.”
Fawaz Sulaiman AlRajhi, chairman of AlRajhi United, noted that the investment sector would continue to benefit from the strong underpinnings of the Saudi economy.
“The private sector, and especially the real estate investment sector will be positively affected by political stability and the capital investment made by the Government,” he said. “The real estate sector will continue to benefit from a raft of related legislative measures.”
AlRajhi’s comments were made in the context of AlRajhi United’s announcement of the completion of the organizational, administrative and logistic preparations for developing one of the largest real estate projects in the Kingdom of Saudi Arabia, commencing with the acquisition of a prime location valued at around SR600 million.
“This investment decision will benefit from positive expectations towards the construction sector, which anticipate the consolidation of its current position as one of the most prominent and fast growing sectors of the economy,” said AlRajhi
Recent economic studies indicate that the construction sector in the Kingdom will enjoy growth of around 6.6 percent per year during 2015 as a result of government spending on massive projects. This represents a 35 percent increase compared with five years ago. The reports note year-on-year increases in the value of planned projects and those underway of around 13.7 percent, amounting to SR4,500 billion.
The site of the new development is adjacent to the Northern Ring Road in northwest Riyadh and has already attracted prominent, well-known retail brands.
“AlRajhi United’s strategy and investment priorities focus on the development of unique, contemporary projects that add value to built-up urban areas and offer enhanced life style options,” said AlRajhi. “Local communities have witnessed accelerating change following developments in consumer living standards and reflecting the growing affluence of individuals. This will have a positive impact on the growth of retail markets and the emergence of mixed-use projects.”
Economic reports indicate that, as a result of continued growth in consumer spending and the increase in the number of Saudi employees in the private sector, there will be growth in retail outlets of about 8 percent by the end of 2016. Today retail markets, and especially mixed-use projects, encompass 1.5 million square meters. Occupancy rates have increased noticeably in most retail outlets by up to12 percent.
More details surrounding the planned project, which is undertaken in partnership with some of the largest global property development partners, will be announced during the coming phase in conjunction with the work plan for implementing the project.
“Riyadh will witness a unique family destination awakening, with an emphasis on high levels of uniqueness in design,” said AlRajhi. “This new development will combine international architectural standards with practicality and state of the art amenities, reflecting society’s cultural standards of beauty while recognizing the changing needs of the modern consumer.”
The AlRajhi United Investments Holdings Company will exert its property development expertise by developing enduring partnerships with local, regional and international partners who share the company’s vision of bringing progressive, contemporary ideas to the property development industry in the Kingdom.
Saudi Gazette
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