沙特市场报告2023.pdf

THESAUDIREPORT2023the definitive guide to the residential,healthcare,education,hospitality,retail and branded residential sectorsOur 2023 branding reflects Saudi Arabias forward-looking approach that has been inspired by Vision 2030.Our team has been inspired by the traditional linear wall art in Aseer,which we have reinterpreted as 13 parallel lines,each representing one province in the Kingdom.Our 13-sided tridecagon similarly reflects the 13 provinces in Saudi.The choice of our vivid colour palette this year is meant to evoke notions of a future without boundaries,which the Kingdom currently exudes with its vast development plans,but always anchored by the colour lavender,which is a tribute to the lavender fields that emerge in the northern deserts of Saudi following winter rains.THE SAUDI REPORT BRAND EVOLUTIONINTRODUCTIONTHE RESIDENTIAL MARKETTHE HOSPITALITY MARKET THE RETAIL MARKETHEALTHCARE&EDUCATIONGCC-BASED HNWI INVESTMENT APPETITEGIGA PROJECTSTHE OPPORTUNITIESABOUT UScontents204664789811213214606FOREWORDDISCOVER THE FULL REPORTJames LewisManaging Director,Middle East&AfricaAs Vision 2030 gathers pace,the exuberance of change is nowhere more visible than across the Kingdoms real estate landscape.2022 will likely be remembered as an extraordinary year for Saudi Arabia.The pandemics shackles have been left behind and Vision 2030 has continued to blossom,unveiling a slew of Giga projects,including Sindalah and Trojena,with the latter winning the rights to host the 2029 Asian Winter Games a first for the Middle East.Furthermore,infrastructure investments have continued to multiply,with Riyadh set to host the worlds largest airport by 2050 when King Salman Airport is completed,capable of handling 185 million passengers more than Dubai International and London Heathrow combined.Last year I said I believed the best is yet to come and I stand by my view.The National Transformation plan is reverberating around the Kingdom,with every corner and sector feeling its impact.Riyadh and Jeddah are together expected to see real estate and infrastructure development projects worth over US$200 billion by the end of 2030.And not to be left behind,the Saudi Downtown Company was also recently established to develop downtown areas and mixed-use destinations in 12 other secondary cities.The phenomenal pace of change is no where better reflected than in the residential and office markets which have been supercharged by the influx of expats and international businesses.Indeed,the government recently reported that the number of professional expats residing in the Kingdom grew six-fold between March and September last year,rising from 200,000 to 1.2 million.Unsurprisingly,this has driven house prices up by record rates with home ownership rates rapidly closing in on 70%,while prime office space has dwindled in major cities such as Riyadh.In our 2023 Saudi Report,we investigate the attitudes and appetite amongst Saudi nationals to rent,or purchase homes through our annual residential survey.We also assess national attitudes towards the Giga projects as investment destinations.New components to our report this year include understanding attitudes of Saudi nationals towards healthcare,education,branded residences,retail and hospitality offerings in the Kingdom.We also take a look at GCC HNWI perceptions of the real estate investment opportunities now emerging in Saudi Arabia.We invite you to explore our fascinating research findings and welcome the opportunity to discuss our analysis with you in more detail.THE SAUDI REPORT|.sa/thesaudireport202367 A BOLD NEW VISION IS UNFOLDING IN SAUDI ARABIARIYADHS REAWAKENING AS A GLOBAL HUBThe total value of real estate projects since the launch of Saudi Arabias National Transformation Plan in 2016 has crossed US$1.1 trillion.The phenomenal transformation taking place in 2022s fastest growing major global economy is clearly visible across the entire urban landscape.With over 555,000 residential units,more than 275,000 hotel keys,in excess of 4.3 million sqm of retail space and over 6.1 million sqm of new office space expected by 2030,the planned construction in the Kingdom will easily make Saudi Arabia the largest construction site the world has ever known.Whats more,healthcare,education and wellbeing sit at the core of the transformative plans,which will contribute to an extraordinary evolution in the Kingdoms physical realm.We currently tracking 15 giga projects in various phases of construction around the Kingdom,many of which are new stand-alone super-cities in their own right.NEOM remains the largest giga-project announced to date,and it has been recently publicised that it will house 9 million residents on completion across an estimated 300,000 new homes.However just US$7.5 billion of sub projects have been commissioned thus far,with construction progress of this tranche of projects standing at 29%.Vision 2030 has lit the embers of excitement across the Kingdom and with NEOM being positioned as a crown jewel in the transformative plans,people are eager to be part of history.Super-cities like NEOM will redefine urban living,while meaningfully embracing sustainability in a resource hungry region.Sub-cities like Oxagon,Sindalah,Trojena and The Line will set new benchmarks for luxury living in the region and with close to 30%of home-owners in Saudi prepared to spend upwards of US$800,000 on a second home in the Kingdom,developers have their work cut out to satisfy this pent-up demand.VISION TURNS TO REALITYAway from NEOM,the US$20 billion Diriyah Gate is one of the Kingdoms other vast projects.The city-sized historic district of Diriyah will add 20,000 homes to Riyadhs residential stock by the time it is completed in 2027 and 46%of construction has been completed on the US$5 billion spent so far.Riyadh itself is poised to undergo explosive growth,with the population projected to close in on 17 million by 2030,up from around 7.5 million today.To meet this ambitious growth target,the city has itself seen real estate projects worth US$104 billion unveiled over the last six years.This excludes plans for the recently unveiled King Salman International Airport expected to be the worlds largest on completion in 2050.The city-sized airport will be spread across 57 square kilometres and is being developed at a cost of US$147 billion,details of which are expected soon.The new international airport accounts for close to 74%of the US$200 billion nationwide infrastructure spend.Riyadhs repositioning as a commercial nerve centre of the Kingdom is well underway.And businesses from the world over are already clamouring to be at the centre of the Middle Easts second and much-needed global hub.Indeed,with Grade A office occupancy levels across the city hovering at around 97%,the planned development of a further 2.8 million sqm of world class office space could not come sooner.The city is also attracting a huge number of internal migrants and with readily available support to get on the housing ladder,house prices are rising rapidly and currently stand some 26%higher than this time last year,with certain parts of the capital registering growth of close to 40%.This record growth is creating some pressures in the housing market,which we will explore later in the report.Sustainability is a key theme for Riyadh too.Recent plans for the 10 square kilometre ALNAMA Smart City,which will be the capitals first zero-carbon city,housing some 44,000 people when completed,we expect,are just the tip of the iceberg.VISION 2030 HAS LIT THE EMBERS OF EXCITEMENT ACROSS THE KINGDOM AND WITH NEOM BEING POSITIONED AS A CROWN JEWEL IN THE TRANSFORMATIVE PLANS,PEOPLE ARE EAGER TO BE PART OF HISTORY.THE SAUDI REPORT|.sa/thesaudireport202389There is significant emphasis being placed on the well-being of the Kingdoms residents through the improvement and provision of world-class urban environments.This includes the US$500 million Riyadh Sports Boulevard as well as the US$23 billion Green Riyadh which will transform the Saudi capital into a verdant metropolis through the planting of 7.5 million trees.Elsewhere,Dammams 650,000 sqm Amanat Al Sharqiya project will see the revitalisation of the citys corniche.And this emphasis on wellbeing extends to the 19,000 hospital beds planned,which is set to cost US$13.8 billion,US$8.6 billion of which is planned for Riyadh Province alone.Furthermore,over 80 new educational institutions are also being built at a cost of US$8 billion.PEOPLE CENTRIC PLANSMajor healthcare projectsUS$13.8 billionUS$819millionUS$756 millionUS$2.3 billionUS$969 millionUS$8.6 billionUS$346millionUS$24 billion Major wellbeing,sports,entertainment,and recreation projectsMajor education projectsRiyadh ProvinceMakkah ProvinceEastern ProvinceAl-Madinah ProvinceAsir Province Other Provinces 7203,2422,0741,0805,146BedsBedsBedsBedsBedsBeds6,565Green Riyadh THE RIGRiyadhs Sports BoulevardUS$500 million US$500 million US$23 billionRiyadh ProvinceMakkah ProvinceUS$778 millionEastern ProvinceUS$640 million Other Provinces Al-Madinah ProvinceUS$142 millionUS$7 billion US$1.8 billionUS$3.7 billionSource:Knight FrankSource:Knight FrankSource:Knight Frankcost of 80 new educational institutionsUS$8 billionTHE SAUDI REPORT|.sa/thesaudireport20231011Knight Franks annual 2023 Saudi Arabia real estate market surveys were conducted in partnership with YouGov.The three surveys were designed to elicit a deeper understanding of preferences and aspirations for residential properties,as well as gauge attitudes towards other real estate sectors,including hospitality,retail,healthcare,and education.Survey 1 1,014 Saudi national households from the cities of Riyadh,Jeddah,and Dammam were surveyed to identify their desired residential properties and living preferences,including a specific focus on the planned Giga projects.Survey 2498 Saudi national households from the cities of Riyadh,Jeddah and Dammam were surveyed to gather their attitudes on various real estate sectors,including hospitality,retail,healthcare,and education,to understand their preferences and spending habits.Survey 3107 GCC-based High Net Worth Individuals(HNWI),each with a net worth of over US$500,000(excluding their primary residence),were surveyed to measure their appetite to invest in real estate in the Kingdom.Our surveys go beyond the raw data as we seek to understand the motives behind responses,as well as differentiate between aspirations and reality,in addition to painting a picture of what the results may mean for the Kingdoms real estate markets.Sentiment is often a better indicator of future capital allocation than just deals;hence our three surveys rely equally on qualitative as well as quantitative data points.WE CONDUCTED THREE DIFFERENT SURVEYS:OUR SURVEYSTHE SAUDI REPORT|.sa/thesaudireport20231213CITYGENDERDammamRiyadhJeddahAGEPROPERTY PREFERENCE68%70%40%15%32%30%60%30%55%43%40%Of respondents currently reside outside of their hometownOf respondents are interested in making a residential property purchase within the next year18-4536+THE RESIDENTIAL MARKETSURVEY 1Saudi national households1,014Source:Knight Frank,YouGovDISCOVER THE DATATHE SAUDI REPORT|.sa/thesaudireport202366%83%91%OVER1/2are interested in purchasing real estate in Saudi Arabiaof respondents visit government facilities for medical treatmentsof respondents travel domesticallyof GCC-based HNWI prefer residential investments66%83%91%OVER1/2are interested in purchasing real estate in Saudi ArabiaMONTHLYINCOMEAGECITYGENDERCOUNTRYNET WORTHNUMBER OF PROPERTIES25%51%18%62%38%37%38%15%55%30%1 8-2 56%D a m m a m15%4 0,0 0 0 O V E R S A R10%18%12%21%33%36%64%18%13%49%16%N O N E5%5%12%45+25-45UNDER SAR 10,000 SARSAROVER US$1 MILLION25-3512345+UNDER US$1 MILLION107 GCC-based HNWI498 Saudi national households HOSPITALITY,RETAIL,EDUCATION AND HEALTHCARE RESPONDENTDEMOGRAPHICS RESPONDENTDEMOGRAPHICSGCC-BASED HNWISURVEY 2SURVEY 3Source:Knight Frank,YouGovTHE SAUDI REPORT|.sa/thesaudireport2023 THE GRASS IS GREENER FOR INTERNAL MIGRANTSTHE RIYADH MAGNETOver the past decade,the Kingdom of Saudi Arabia has undergone a tremendous socio-economic transformation,with declining household sizes and internal migration emerging as some of the first byproducts of rapid modernisation.A HOME FROM HOME FOR NOWTHE ONGOING DECREASE IN HOUSEHOLD SIZES AS YOUNG SAUDIS FLY THE NEST AT A YOUNGER AGE IS SUSTAINING HIGH LEVELS OF DEMAND.Despite the high levels of internal migration,a significant proportion of respondents appear to be uncommitted to establishing a permanent base away from their home cities.Indeed,68%perceive themselves as temporary residents,indicating they will move back home should the right job present itself.The graph below shows the movement of residents in and out of their home cities based on their income.Most people between the income brackets of SAR 4,000 to 15,000 per month in Jeddah and Riyadh appear more footloose and are willing to move within the Kingdom.After achieving higher incomes,however,the desire to relocate once more declines rapidly.In Dammam,however,the story is a bit different.Most prefer to remain in the city until they breach an income threshold of SAR 40,000 per month.Anecdotally,Saudi ARAMCO,which is headquartered in Dammam,is known to offer high starting salaries,which could perhaps partly explain this trend.The capital city,Riyadh,has been one of the major centres of attraction for those looking to climb the career ladder,with Survey 1 highlighting jobs as the key driver for Saudi nationals relocating to Riyadh.This trend is also present in other major cities,like Jeddah,the commercial capital of the western region and Saudis second city.In Survey 1,we investigated the impact of domestic migration on property choices to understand how developers and investors might respond to this apparent opportunity.Among our Riyadh respondents,just over half(53%)were born in the capital and consider it their home.In Dammam,this figure rises to 58%,while in Jeddah,almost two-thirds of respondents were born and raised in the city.The disparity in the figures for the first time has allowed us to quantify the potential volume of internal Saudi migrants in Riyadh,which has significant implications for developers and planners.The most common reason to temporarily migrate to a different city are work or career linked.Those who migrate temporarily prefer living in smaller units(74%).Additionally,most(62%)are tenants,presumably due to the flexibility offered through renting and plans to buy a house in their hometown instead,both of which were key takeaways in our 2022 Saudi Report.We will return to this theme later in our Opportunities chapter.0%10%20%30%40%50%60%70%OwnRentLive with familyProperty prefrence(by migration status)Living arrangements(by migration status)Source:Knight Frank,YouGovAverage monthly incomeSource:Knight Frank,YouGovSource:Knight Frank,YouGovDomestic migration levels(by monthly income)survey 1 Perc