RIYADH: Residential transaction values in Saudi Arabia surged 25 percent year on year in the third quarter of 2024, totaling SR35.4 billion ($9.4 billion), a new report showed. 

According to Knight Frank, the volume of deals also increased by 12 percent, reaching 45,924 deals, highlighting strong demand in the Kingdom’s housing market. 

Riyadh led this growth with a 16 percent increase in sale numbers and a 41 percent rise in transaction values compared to the same period of 2023. The city’s strong performance underscores its position as a central hub for real estate activity in the country. 

This comes as Saudi Arabia’s Vision 2030 aims to boost homeownership to 70 percent by 2030, driving extensive residential development. 

Many of these projects are undertaken by ROSHN, a $20 billion initiative from the Public Investment Fund aimed at delivering over 200,000 homes across the Kingdom. 

“With a current supply of 3.5 million units across the Kingdom’s five major cities, we forecast the residential supply to reach nearly 3.7 million units by the end of 2026,” stated Knight Frank. 

This anticipated increase aligns with the Kingdom’s broader urban development goals and Vision 2030 initiatives aimed at meeting housing demand driven by population growth and economic reforms.

Further supporting the market’s momentum, the report highlighted that Saudi banks issued SR55.7 billion in residential mortgage loans during the first eight months of the year, marking a 3 percent increase from the previous year. 

This growth in mortgage lending signals steady demand for homeownership and real estate investment. 

This follows a continued increase in demand over the last several quarters, as the Kingdom experiences growth in both local and expatriate populations amid efforts to attract investment and advance diversification projects. 

In a separate report in September, Jones Lang LaSalle noted that mortgage contracts in Saudi Arabia reached 24,482 in the second quarter of the year, reflecting a 12 percent year-on-year increase. 

The total value of these agreements amounted to SR18 billion, marking an 8 percent rise compared to the same period last year. 

The report emphasized that the growth in mortgage activity highlights sustained demand for residential properties and aligns with the government’s efforts to promote homeownership among citizens.

RIYADH: Dubai’s warehousing and industrial rental rates have increased by 13 percent year on year, underpinned by strong demand, a new report revealed. 

According to the latest UAE Industrial Market 2024 analysis by commercial property estate agent Cushman and Wakefield Core, areas including Dubai Investments Park and Dubai Industrial City witnessed the highest rental increases of 25 percent and 21 percent, respectively.  

Abu Dhabi’s market has also seen a steady yet moderate rise in rental rates, particularly in areas such as Mussafah and the Industrial City of Abu Dhabi, averaging a 5 percent year-on-year surge across the city. 

This comes as a significant imbalance exists between demand and supply as the requirement for warehousing and industrial facilities has consistently outstripped availability, leading to a steady absorption level and higher rental rates.  

Various factors, including the growth of e-commerce and logistics sectors, the expansion of oil and gas companies, and the entry of new firms into the market, have fueled demand. 

This also aligns with the projection that the UAE residential real estate market will register a compound annual growth rate of more than 8 percent during the forecast period, 2022-2027, according to market research firm Mordor Intelligence.  

“The potential for strong returns and the opportunity to meet the increasing demand for high-quality warehousing and industrial spaces are key factors attracting institutional investors and non-industrial developers to the industrial sector,” said Prathyusha Gurrapu , head of research and consultancy at Cushman and Wakefield Core.  

“As warehousing and industrial assets continue to offer attractive yields and stable demand, more developers and investors are recognizing the value in diversifying their portfolios to include warehousing and industrial facilities,” Gurrapu added.

The report further said that Dubai and Abu Dhabi are seeing significant industrial development, with rental rates rising and strong demand in key hubs such as Dubai South, Jebel Ali Free Zone, and Abu Dhabi’s KEZAD Al-Mamourah.

Gurrapu said the UAE’s industrial and warehousing market is witnessing a transformative phase, with the convergence of technology, sustainability, and strategic expansion reshaping the landscape. 

“As demand continues to outstrip supply, particularly for Grade A facilities, we anticipate sustained rental growth and heightened investor interest in the sector through 2025 and beyond,” Gurrapu said.

“Looking ahead, we see continued growth in the UAE’s industrial market, driven by the expansion of infrastructure such as Etihad Railway and the ongoing development of Al Maktoum International Airport. These infrastructure projects will enhance connectivity and increase the demand for warehousing and logistics spaces,” she added. 

The UAE’s vision of becoming a smart city leader is transforming its industrial landscape. 

Warehousing and logistics centers increasingly incorporate cutting-edge technologies like automation, artificial intelligence, and the Internet of Things for enhanced operational efficiency. 

The demand for sustainable, energy-efficient facilities is also growing. Green buildings and eco-friendly warehousing solutions align with the UAE’s broader goals of reducing carbon footprints and promoting sustainable development.