Field of dreams
A forecast of six real estate trends in Saudi Arabia for 2011 reminds Kipp of a Kevin Costner where unknown forces urged him to build a baseball field that will attract other-worldly players.
March 28, 2011 4:38 by Precious de Leon
5. Light industrial and logistics sectors are on the rise
Driven by state owned enterprises and buoyed by strong oil prices, the growth of light industrial and logistics will promote economic growth and increase employment opportunities. In 2011, the focus will shift to more specialist logistics developments and for locations offering multimodal logistics networks integrate air, sea and rail.
This already extensive sector is still poorly serviced in terms of quality, creating opportunities for high quality modern real estate. The focus on quality will be supported through investor demand, which is strongest for securely leased, institutional grade product. Although a long term trend, the industrial sector is backed by the emergence of university related research parks that aspire to commercialise academia in order to create a positive feedback loop: developing intellectual property, creating jobs, fostering economic growth, which will ultimately boost demand for industrial real estate.
6. Growth of middle income, mid-scale residential developments
Whereas the residential sector was traditionally dominated by micro-developments (less than 5 units), the market will move more to mid-scale planned communities built by professional developers. Since the market will require approximately 900 new homes delivered each day over the next five years, the efficiency realised through centrally planned mid- to large-scale communities is ideal. In terms of market segmentation, high-end demand is largely met and the extensive government initiatives are targeting the affordable housing segment.