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Construction activity will gain pace in 2024, led by hospitality and residential segments, says Kamco Invest executive The world’s most ambitious giga projects with a gross development value of $1 trillion will be showcased at the four-day Cityscape Global in Riyadh from September 10. The projects are expected to deliver 18 new megacities, over 3.5 million new homes, and over 10 million square metres of commercial space, according to Cityscape Global. Under the theme “Future of Living”, the event will be held at the Riyadh Exhibition and Convention Centre and host 2,000 investors, more than 350 exhibitors, and over 250 local and international speakers. Over 180,000 domestic and international attendees are expected at the event. The key topics include The Future Living Summit, sessions focusing on future living; The Institutional Investor Forum, a space for local and international investors to network and invest in upcoming future projects in the GCC; CityscapeWIRE (Women in Real Estate) and the Design and Architecture area, showcasing industry trends. In an interview with Zawya Projects, Thomas Mathew – Vice President, Kamco Invest, said construction activity in Saudi Arabia will gain pace next year, led by hospitality and residential segments. “All segments are expected to see supply additions in 2024 activity, with hospitality and residential expected to lead other segments such as commercial office towers,” he added. The Kingdom has awarded construction deals with a combined value of $250 billion since 2016 in line with its ambitious Vision 2030 strategy, real estate consultancy Knight Frank said in a report. Since then, around $1.25 trillion worth of real estate and infrastructure projects have been launched, it added. However, Mathew said that real estate transaction activity declined by 30 percent year-on-year (YoY) in transaction volumes in the first eight months of 2023 and was lower by 19 percent YoY in terms of value transacted. The lower activity was due to increased prices, higher interest rates and a decline in new supply additions across sub-segments coming into the market, he added. In terms of segments, office space has seen significant activity with improving occupancy rates, dominated by local companies and family businesses looking to move to new areas towards the North and the West. Mathew believed overall supply across real estate segments will likely improve in 2024, with rental growth expected to be mixed. “Office rents will continue to trend upwards this year and in 2024, as quality office space supply remains limited, especially in Riyadh.” Super regional malls are expected to witness higher footfall and rental growth than smaller malls, as large format malls are just beginning to come into the market, Kamco Invest executive noted. On the other hand, residential rents in Riyadh and Jeddah will continue their drive towards affordability, leading apartment rents to remain more stable than villa rents, he stated. |
