Riyadh Real Estate

Market Overview
H2- 2014
w w w. c e n t u r y 2 1 s a u d i . c o m
Riyadh Real Estate
Market Overview
H2- 2014

Research & Advisory

Department
Message from
General Manager
2014 was a vibrant year for KSA real estate sector. After a long debate,
much awaited mortgage law is in implementation phase and we, at
Century21Saudi are watching closely its impact on real estate market.
Several mega projects in residential, commercial and hospitality sectors
which were supposed to be completed in 2014 are delayed to 2015 -16.
Much has changed over the last years in KSA real estate sector, since
the inception of Century21Saudi. What has not changed though is our
commitment to provide high quality real estate services to our valued
clients. Our dedicated staff continually ensures that Century21Saudi
stands heads above the rest with regard to the quality and value of our
services. When it comes to service, value, convenience, and integrity, we
want every client to have such a great experience with Century21Saudi
that they include us in their preferred real estate partners list.
This issue of Riyadh Real Estate Market Overview H2- 2014 will provide
you a snapshot of real estate activities during 2014. We are confident that the report will enhance your knowledge
,
about city s real estate activities.
As we look to the New Year(2015) and beyond, we will continue to challenge the traditional business-as-usual
model in the real estate industry and strive to create a better way to serve our customers.
Finally, I want to thank each of our stakeholders for their tireless efforts and dedication that has helped Century21Saudi
to be the best real estate partner of our clients.

Al Waleed Bin Zoman

General Manager
6
Economy RIYADH REAL ESTATE MARKET OVERVIEW

KSA Economy - Overview

The performance in 2014 came up at the lower end
of expectations with a deficit of SR 54 billion despite
comfortable level in both oil prices ($99.5 per barrel
for Brent in 2014) and oil exports (year-to-October
7.1 million barrel per day). This first fiscal deficit since
2009 was mainly due to both falling revenues and
rising expenditures. Total revenues slipped by over 9
percent compared to the previous year, yet remained
above the SR1 trillion mark for the fourth year in a row.
The growth in fiscal expenditures, at 12.7 percent, was
the highest in the last three years, exceeding the SR 1
trillion mark for the first time. Preliminary economic data
shows that 2014 was a healthy year for the economy
with real GDP growth of 3.59 percent. Non-oil private
sector maintained strong growth, at 5.7 percent year-on-
year, with growth of construction, non-oil manufacturing,
transport and communications sectors above 5 percent
year-on-year. Elevated oil export revenues maintained
a double digit current account surplus at 14.1 percent of
to the overspending level in 2011 when spending.
Revenue totaled SR 1,046 billion. It was 22 percent
above the budgeted level, but 9.5 percent lower than
their 2013 level. We estimated that the 2014 budget was
based on a price for Saudi oil of $67 pb and production
of 9.7 mbpd.
Actual price of Saudi oil averaged $95.8pb in 2014, 8
percent lower than their level in 2013, but 43 percent
higher than that used in the budget. Non-oil revenues
were SR 115 billion, down around 5 percent on the 2013
total.
KSA Budget (2011 - 2014)
1,400 450

GDP or $106.4 billion. 1,200

400

350

1,000 300

Expenditure amounted to SR 1,100 billion, 28.7 percent 800

250

200

above the budgeted level and 12.7 percent higher 600

150
SR (Billion)

than in 2013. The annual increase in 2014 was the 100

400 50

highest since 2011 and compares to an average over 0

200

the past two years of 8.7 percent. In nominal terms, the -50

0 -100

overspending amounted to SR 245 billion, second only 2011 2012 2013 2014

Revenue Expenditure Surplus/Deficit

Year Revenue Expenditure Surplus/Deficit

2011 1,110 804 206

2012 1,240 853 387

2013 1,131 925 206

2014 1,046 1,100 -54

** All the numbers are in SR Billion
RIYADH REAL ESTATE MARKET OVERVIEW 7
 Mortgage
8 Law RIYADH REAL ESTATE MARKET OVERVIEW
KSA Mortgage Law
In first quarter of 2013 the long-awaited mortgage law
was circulated in order to cover several of the aspects
particularly related with real estate mortgage. The
mortgage law provides, among other things, a procedure
for banks and others to become licensed to provide
mortgage finance, and a maximum loan-to-value ratio
of 70 per cent.
The mortgage law comprised of
Real Estate Financing Law
Supervision of Finance Companies Law
Financial Leasing Law
Real Estate Mortgage Law
Enforcement Law
Rather than one law, what was approved is a package
of five laws that will not only outline enforcement of
mortgage contracts, but also cover mortgage registration
and real estate financing companies.
It was expected that implementation of mortgage law
will stabilize the market in long run while it will take some
time before the full benefits of the mortgage law are
realized and that the initial impact will perhaps not be
that significant. As per Century21Saudi expert’s opinion
it will take 1 to 2 years to test the effects of mortgage law
on local market.
Key Highlights
SAMA will be in charge of regulating the sector
and empower to carry out licensing the real estate
finance companies and to encourage fair and effective
competition between Real Estate finance companies.
Real estate finance companies shall disclose
in the annual reports the risks that can be hedged by
insurance and how to deal with such risks.
The Real Estate Refinancing Corporation may
repurchase any of its debt securities at any time.
The Real Estate Refinancing Company may
obtain the written approval of SAMA, and the Capital
Market Authority, prior to issue any financial derivatives.
No one will be allowed to carry out any finance
activity without a license from SAMA in accordance with
the law and this regulation.
The finance Companies will only be engage in
activities for which it has been licensed and which are
permitted by the finance laws and their regulations.
Minimum paid up capital of the Finance
Companies to carry out real estate finance activities will
be SR 500 million.
The License shall be granted for a term of five
years and may be renewed based on a request by the
finance company.
SAMA will charge SR 200,000 for issuing the
license, SR 100,000 for license renewal, and SR 50,000
for any amendment in the license.
The minimum requirement for real estate funds
will range from 10 million to 500 million, depending upon
scope of business.
As it was expected earlier that during initial phase the
law will have some negative impacts on real estate
market as the market needs some adjustments in order
to implement the law properly.
When compared with last quarter of 2013 Century21Saudi
noticed a visible decline in the number of transactions

RIYADH REAL ESTATE MARKET OVERVIEW
and value of transactions during the last quarter of the
year 2014.
When compared on Y-O-Y bases, in Riyadh the number
of residential real estate transactions in 4th quarter
reduced by 25% while the number of commercial real
estate transactions reduced by 7%. In parallel, the
values of residential real estate transactions in the 4th
quarter reduced by 7% and commercial real estate
reduced by 3% when compared Y-O-Y basses with the
last quarter of 2013.
The same effect has been noticed in the other major
cities like Jeddah, Makkah, & Dammam/Al Khobar
where the number and values of transactions reduced
by a significant proportion.
It is expected that in the long term the mortgage law will
have very positive impact on the market as the stabilize
market will increase the level of trust for banks, financial
Mortgage
Law 9
institutes, real estate developers, and investors. In
parallel end users will also be benefitted as supply of
new housing will increase in long term and more options
will be available in the market to have mortgage services.
The mortgage law is an obligatory step taken by the
government to regularize the market. However, a
proper implementation of the new regulations is critical;
otherwise the market will not be fully benefited from its
positive effects.
Century21Saudi is watching the market very closely and
will keep you posted on the developments through our
regular market bulletins.
10 RIYADH REAL ESTATE MARKET OVERVIEW

Riyadh Residential Market

Overview

Riyadh Residential Market

Overview
 RIYADH REAL ESTATE MARKET OVERVIEW
Residential 11

Riyadh Residential Market

Overview
Residential market is characterized by an imbalance
of housing, particularly at the low- and middle-income
segments. Although the government is taking some
serious steps to provide affordable housing to its
nationals but supply-demand gap seem to be persisting
in medium to long run. Work is ongoing on affordable
housing project in Riyadh, Saudi Arabian Parsons
Limited (SAPL) is doing full construction supervision of
all infrastructures and landscaping.
Demand for housing is mainly driven by population
growth coupled with reduction in average household
size and upsurge in disposable income.
It is expected that implementation of mortgage law
will regularize the market and more financing options
will be available for potential buyers which ultimately
will encourage developers to deliver more units in the
market.
Supply
Around 35,000 residential units have been delivered
during 2014, with this addition Riyadh housing stock has
reached around 975,000 units. Most of the supply was
from small to medium size developers. North of Riyadh
was hub of residential development activities during
2014 and west saw the least residential development
activities.
No of Expected
Most of the projects which were scheduled to deliver
in 2014 are delayed and expected to be completed in
coming years. One of the major reasons behind this
delay was unavailability of suitable labor force, as after
government crackdown on illegal workers, most of the
contracting firms started facing labor shortage issues.
Although a couple of mega projects are in planning
phase by key developers but Century21Saudi did not
witness any major project announcement during 2014.
Demand
Young and fast growing population, rapid urbanization
and rising personal income are driving the demand.
It is very obvious that real demand lies in middle
income class as sufficient supply is available for high
end residential units for upper middle class and VIPs.
Government is playing their part to reduce demand-
supply gap in the middle income group by constructing
500,000 affordable houses for Saudi nationals.
Mega infrastructure projects like “Riyadh Metro” is
also creating a demand for additional housing for their
contractors and sub-contractor’s expatriates employees.
Residential Units Demand Supply Matrix
70,000 30,000

Project Name
Units Completion 60,000
25,000

Sunset Project 300 2015 50,000

20,000

Ritaj Villas 292 2015 40,000

15,000

Manazil Al Qurtuba 1300 2015 30,000

(Phase-2) 20,000
10,000

Bayt Al Hurr 216 2016 10,000

5,000

Masharif Hills 172 2015 - -

(Phase-1)
2013 2014 2015-F 2016 2017 2018 2019 2020

Supply Demand Difference

12
Residential RIYADH REAL ESTATE MARKET OVERVIEW

Market Performance Villas

Riyadh residential market witnessed a mix trend The median prices of villas have increased across most
during 2014. In the first half of 2014 the market districts of Riyadh by an average of 4% during first half
witnessed a steady rise in the sale prices and rental of 2014 while second half did not witness any further
rates of residential units. In the second half of 2014 increase in the prices. As usual the increase was most
after the implementation of loan-to-value ratio of 70% significant in north of Riyadh including Al Yasmin District,
Century21Saudi witnessed relatively slower activities in Sahafa District, and Khuzami District.
the market. Several rumors are in the market about the Rental rates of villas mostly remained stable throughout
reduction of sale prices and rentals of residential units the year without any major change during H2-2014.
but we are unable to verify them through valid numbers. Mulqa, Al Yasmin, Sahafa at Northern side, Khuzami
In parallel we saw stability in the prices and rental rates at Western side and Qurtaba & Ishbiliyah at Eastern
without any further reduction or escalation. side are the most alluring locations for villas. In these
districts average sale price of a small size villa/duplex
ranges between 1.4 million to 1.8 million Saudi Riyals.
Average Sale prices of Villas (250 - 350 sq m) (SR, 000)
2,000 5%

1,800

4%
1,600

1,400
3%

1,200
Villas Prices

Variation

1,000 2%

800

1%
600

400
0%

200

0 -1%
Qurtaba Al Yarmook Ishbiliah Wadi Laban Arqa Al Nada Al Yasmeen Al Mulqa Al Aziziah Al Shifa Al Swaidi Al Nazha Al Izdhar Al Ta'awun

(H2-2013) Average Sale Prices (H2-2014) Average Sale Prices Difference between (H2-2013) & (H2-2014) Prices

Apartments
As a preferred mode of accommodation for expatriates Apartment sale prices have moderate increasing trend
due to affordability concern apartment’s sale prices and in northern and eastern parts of Riyadh while in south
rental rates increased with moderate ratio across most the prices remained stable throughout the year.
districts of Riyadh during first half of 2014. Median sale price of medium size apartment (130 sqm
When compared with H1-2014, during second half of the to 160 sqm) is around SR 385,000 in southern districts
year rental rates of apartments remained stable in most and around SR 550,000 at northern Riyadh.
of the districts without any further increase or decline.
 RIYADH REAL ESTATE MARKET OVERVIEW
Residential 13

Average Sale Prices of Apartments (130 - 160 sq m) (SR)

1,000,000 7%

900,000
6%

800,000

5%

700,000

4%
600,000
Apartments Prices

Variation
500,000 3%

400,000
2%

300,000

1%

200,000

0%
100,000

0 -1%
Al Hamra Al Yarmook Ishbiliah Wadi Laban Al Hada Arqa Al Ghadeer Al Yasmeen Al Mulqa Dar Albaiza Al Aziziah Al Shifa Al Ta'awun Al
Sulaymania

(H2-2013) Apartment Sale Price (H2-2014) Apartment Sale Price Difference between (H2-2013) & (H2-2014) Price

Average Annual Rents for Apartments (130 - 160 sq m) (SR)

60,000 8%

7%

50,000

6%

40,000 5%
Apartments Rents

4%

Variation
30,000

3%

20,000 2%

1%

10,000

0%

0 -1%

(H2-2013) Apartment Rents (H2-2014) Apartment Rents Difference between (H2-2013) & (H2-2014) Rents

Riyadh Compound Market

After opening of several mega compounds during Demand for compound accommodation increased by
last two years the demand-supply gap reduced with 10% to 15% during 2014. The major demand drivers for
a reasonable proportion. The newly open compounds the compounds are “Riyadh Metro Project” and other
in 2014, including “Al Reem Compound” & “Bonita infrastructural projects.
Village Compound” received a good response from the
market and enjoying a good occupancy rates. “Nakhla Residential units within compounds are presenting the
Compound” is also one of the major openings during highest stratum of residential rental market. Median
2014; the compound is partially opened for lease as the rent of a medium size villa ranges between SR 185,000
work is still ongoing for some phases of the compound. to SR 250,000, while average rent of a two bedroom
“Al Bustan Compound” is the most successful compound apartment ranges between SR 110,000 to SR 155,000
among the newly opened compound and offering a very
high class living environment for expatriates.

Total Average 3 Bed Apartment Average Villa/Duplex

Supply in Pipeline (Units)
Residential Inventory (Units) Sale Price (SR) Sale Price (SR)
Market Trends SR 450,000 to SR
975,000 100,000 – 75,000 SR 1m to SR 1.3m
550,000

Market Trends
14
Residential RIYADH REAL ESTATE MARKET OVERVIEW

Average Annual Rents for Apartments (130 - 160 sq m) (SR) Average Sale Prices of Apartments (130 - 160 sq m) (SR)

Area Min Max Area Min Max

Riyadh East Riyadh East
Qurtaba 29,000 32,640 Qurtaba 650,000 700,000
Al Monisiyah 26,000 30,000 Al Monisiyah 500,000 600,000
Gharnada & Alshahda 30,000 32,000 Ishbiliah 500,000 675,000
Al Hamra 30,000 35,700 Riyadh West
Al Nazeem 20,000 25,000 Wadi Laban 400,000 550,000
Al Janadriah 22,000 25,000 Nakheel 750,000 950,000
Al Naseem (East) 23,000 26,000 Zahrah Laban 475,000 600,000
Al Naseem (West) 20,000 24,000 Riyadh North
Al Nahdha 23,000 26,000 Al Yasmeen 650,000 900,000
Riyadh West Hateen 550,000 750,000
Wadi Laban 22,000 25,000 Al Mulqa 600,000 825,000
Nakheel 45,000 60,000 Riyadh South
Raed 45,000 55,000 Dar Albaiza 300,000 400,000
Riyadh North Al Aziziah 350,000 450,000
Al Nafal 30,000 35,000 Badr 300,000 375,000
Al Yasmeen 30,000 36,750 Riyadh Centeral
Al Sahafah 30,000 35,000 Al Ta'awun 750,000 850,000
Al Aqeeq 33,000 36,000
Average Sale prices of Villas (250 - 350 sq m) (SR)
Al Mulqa 30,000 41,600
Riyadh South Area Min Max

Dar Albaiza 18,500 22,500 Riyadh East

Al Aziziah 20,500 24,000 Qurtaba 1,400,000 1,600,000

Al Shifa 21,000 25,500 Al Monisiyah 1,350,000 1,550,000

Badr 21,000 24,000 Al Rimal 1,450,000 1,650,000

Al Marwah 18,000 24,000 Gharnada 1,600,000 1,800,000

Shabra 22,000 25,000 Al Hamra 1,650,000 1,950,000

Al Swaidi 23,000 25,750 Al Quds 1,600,000 1,900,000

Al Zahrah 22,000 25,000 Al Yarmook 1,450,000 1,650,000

Al Areeja 18,500 22,500 Al Qadsiah 1,350,000 1,550,000

Al Badiah 20,000 25,000 Al Ma'eezlah 1,300,000 1,500,000

Al Hazm 20,000 25,000 Ishbiliah 1,450,000 1,750,000

Al Darehmiah 21,000 24,000 Riyadh West

Riyadh Centeral Wadi Laban 1,350,000 1,550,000

Al Marooj 30,000 40,000 Riyadh North

Al Yasmeen 1,700,000 2,200,000
Al Nazha 35,000 41,600
Al Sahafah 1,500,000 1,700,000
Al Izdhar 30,000 35,700
Al Mulqa 1,800,000 2,500,000
Al Ta'awun 30,000 39,140
Riyadh South
Al Museef 29,000 34,000
Dar Albaiza 950,000 1,150,000
Al Aziziah 1,150,000 1,350,000
Al Shifa 1,000,000 1,250,000
Al Swaidi 1,150,000 1,350,000
Al Badiah 1,200,000 1,450,000
Riyadh Centeral
Al Nazha 1,600,000 1,850,000
Al Izdhar 1,500,000 1,700,000
Al Ta'awun 1,500,000 1,800,000
 RIYADH REAL ESTATE MARKET OVERVIEW 15

Riyadh Office Market

Overview
16
Office RIYADH REAL ESTATE MARKET OVERVIEW
Riyadh Office Market Overview
Characterized by oversupply, office market in Riyadh
remained a tenant’s market during 2014 while landlords
faced tough time to maintain healthy occupancy rate.
Higher vacancy rate in the city is not only attributed
to the oversupply, as most of the office buildings with
higher vacancy rates are not addressing the tenants
requirements of car parking, smart utilization of office
space and security services properly. Buildings with
smart design, sufficient car parking space, and security
services are enjoying better occupancy rates.
Because of slow construction work mega projects
like “King Abdullah Financial District”, ITCC, and
“Endowment Project” did not deliver any office space
during 2014 and it is expected that none of these project
will deliver any office space during 2015.
Generally office rentals remained stable throughout the
year in different districts of Riyadh while Century21Saudi
witnessed several properties where landlords decreased
their rentals to improve their occupancy level.
Supply
Supply outpaced demand during 2014. Other than mega
projects like Olaya Towers, and King Abdulaziz Center
for National Dialogue, couple of B class office buildings
has been completed during 2014, collectively delivered
around 200,000 sqm of office space.
Anticipated Supply
Project Name GLA (sqm)
KAFD 800,000
ITCC 230,000
Endowment Project 95,000
Majdoul Tower 70,000
With the addition of this new supply Riyadh total office
stock reached to around 2.4 million square meters.
One million square meter of new supply is due to come
during 2015 -17, which will further depress the market.
Demand
Other than public sector, the companies working for
“Riyadh Metro Project” and other infrastructure project
as contractors and sub-contractors remained the main
demand generators of office space during 2014.
Reflecting continued improvements in the business
environment during 2014, the demand for quality office
space from multinational companies started to increase
as well.
The most desirable size of the office in the market
ranges between 250 sqm to 400 sqm and these office
sizes are collecting better rentals from the market.
Because of ongoing construction (Riyadh Metro Project)
beside Olaya road, presently business owners prefer to
have their office set ups beside King Fahad road, rather
than Olaya road.
Expected Completion
2016
2015
2016
2016
 RIYADH REAL ESTATE MARKET OVERVIEW
Office 17

Market Performance
Overall office rentals remained stable during 2014 with
a slight decline in B class Office space in some areas of
Riyadh.
A general increase in demand of office space has been
noticed during 2014 but because of over supplied market
the effect of that increase in demand was not significant
enough to be noticed.
The vacancy rate varies between 15% to 20% and there
will be an upward pressure on vacancy rate with the
completion of new supply during 2015 & 2016.
Average H2 - 2014 rental prices varied across different
districts of Riyadh from a low of SR 350 per sqm in
southern part to a high of SR 1,200 per sqm in CBD in
grade A & B+ offices.
After a good market acceptance of business parks
project in Riyadh it will be interesting to see how over
supplied market will treat the mega project completed
during 2014 like “Olaya Towers” and “king Abdulaziz
Center for National Dialogue.

Office
OfficeRental
RentalRates (SR)H2-2014
Rates H2 - 2014(Grade
(Grade AA&&BBClass)
Class)
1,400

1,200

1,000
Office Rents (SR)

800

600

400

200

0
Eastern Ring Khurais Road Northern Ring King Fahad Olaya Road Tahlia Road Oroba Street Al Mathar Dabbab Street King Abdullah
Road Road Road (Center) (Center) Street Road

H2-2014 Min H2-2014 Max

18
Office RIYADH REAL ESTATE MARKET OVERVIEW

Office Rental Rates - H2 2014 (Grade A & B Class) (SR/SQM)

Area Min Max

Eastern Ring Road 550 750
Khurais Road 650 825
Sheik Hassan bin 450 550
Hussain bin Ali Road
Khalid Bin Waleed 550 650
Road
King Abdullah Road 550 665
(East)
King Fahad Road 750 900
(North)
Northern Ring Road 950 1,200
Anas bin Malik Road 550 750
Abu Bakr Siddique 550 650
Road
Otman bin Affan 550 600
Road
Olaya Road (North) 750 850
Al-Swaidi Al-Aam 380 450
Road
Ayesha bint Abu 380 450
Bakkar Road
King Fahad Road 700 925
(Center)
Olaya Road (Center) 800 1,000
Prince Mohammad 850 1,100
bin Abdul Aziz Road
(Tahlia)
Oroba Street 700 850
Al Takhasusi Road 750 850
Dabbab Street 650 775
King Abdullah Road 750 850
Moosa Bin Naseer 650 750
Road
Salah-U-Din Road 750 800
Malaz
Al Hasa Road 650 750

Average Asking
Total Inventory Y-T-D completed Stock
Vacancy Rate Rent (B Grade
Office (sqm) (sqm)
Offices in CBD)
Market Trends
2,400,000 15%-20% 150,000 SR 800

Market Trends
 RIYADH REAL ESTATE MARKET OVERVIEW 19

Riyadh Retail Market

Overview
20 Retail RIYADH REAL ESTATE MARKET OVERVIEW
Riyadh Retail Market Overview
The Capital`s Retail Real Estate Market witnessed
a steady growth in the last six months of 2014.
Century21Saudi observed that major expansions took
place predominantely in the North of Riyadh.
The sector was driven by expansions from major
hypermarkets such as Panda and Tamimi, opening of
new malls, Nakheel Mall with GLA of 53,251 sqm and
Tala Mall rebranded from China Mart). While Alia Plaza,
Sahafa Center and Balancia Bazar are some of the
significant additions to the strip retail centers. Lastly,
expansions by major food chains were the key elements
that triggered the sector’s growth.
Ongoing construction of “Riyadh Metro Project” is
creating lot of traffic issues in CBD (Olaya and King
Fahad Road) making these locations less desirable for
retailer’s expansion. Also Century21Saudi witnessed
some retailers moving from Olaya road to Takhassusi
Street, Urubah Road, and King Abdulaziz Road.
Projects Completed during 2014
Project Name GLA (sqm)
Nakheel Mall 53,251
Tala Mall 31,216
Balancia Bazaar 26,700
Khatwah Center
12,060
Sahafa Center 8,700
Alia Plaza
Yasmeen Center
45,366
15,270
Supply
The H2 of 2014 ended with additions to the overall stock
of retail area in Riyadh. New malls have been completed
and opened to the public. The largest addition by area
was the Nakheel Mall with a gross leasable area (GLA)
of 53,251 sqm followed by Tala Mall (rebranded from
China Mart) with a GLA of 31,216 sqm. Alia Plaza is
also another major completion of H2- 2014 with the total
GLA of 49,475 sqm. These new completions offer a
diverse blend of international brands and retailers which
include anchor tenants, hypermarket, food court, family
entertainment area and a big parking space.
Century21Saudi believes that the concept of traditional
shopping malls in Riyadh has taken a new turn and
the market has moved towards a new idea called Strip
Retail Centers. Alia Plaza, Sahafa Center, Balancia
Bazaar, Orchid Center are the new additions in strip
retail centers in Riyadh.
The completion time of the two major projects (KAFD
and ITCC) in Riyadh has been extended to 2015 - 16
or beyond. These delays have resulted in their retail
components being pushed forward into the future years.
The aforementioned projects will contribute around
150,000 square meter of retail space. This will take
the total stock of retail space in Riyadh over 3 million
square meters. Some of the key & major projects under
construction (such as Malaz Mall, The Boulevard, The
Corner, Rekal Plaza, show a clear sign of growth and
investment in the Riyadh Retail Market.
Demand
Century21Saudi observed that the most significant
elements that triggered the retail sector in 2014 towards
a steady pace are the vigorous economic conditions
that contributed to the economic growth. The constant
population growth rate and increase in disposable
income among Saudis and Expats has kept the clock
ticking in Riyadh Retail Market.
 RIYADH REAL ESTATE MARKET OVERVIEW Retail 21

Anticipated Supply
Project Name GLA (sqm) Expected Completion
Malaz Mall 49,048 2016
The Boulevard 30,000 2015
The Corner 8,000 2016
Al Yarmouk Center 5,457 2015
Jardin Mall (Riyadh Park) 92,000 2017
Al Diriyah Festival City Mall 250,000 2018

The changing life styles of Young Saudis boosted the
Sector`s overall sales figures and is the most desirable
sector especially in Riyadh.
As approximately 70% of the population is below the age
of 30 years, they have brand awareness which makes
them the prime target market for businesses in the retail
sector.
the city while maximum in the north of Riyadh.
City wide vacancy rate during 2014 was around 10%
to 15%. Although a large supply is expected to be in
the market during 2015 - 16 but by seeing the retailer’s
expansion trends and opening of news brands we can
assume that the new supply will be absorbed in the
market without any further pressure on vacancy rates.

The Retail Market has been galvanized through rapid
expansions by Hyper Markets and Food Chains. Lastly,
the demand for luxury and designer brands is on the rise
in Riyadh and this has exhilarated the idea of strip retail
centers.
“Unified Real Estate” is the most active developer in the
city for modern strip retail centers while “Panda” and
“Tamimi Markets” are anchor tenants with most active
expansion plans. “Danube” is also expanding their
network while “The Farms” newly entered in Riyadh
market with further expansion plan.

Market Performance Median rental rates remained stable in most areas of

In the second half of 2014 the rental values of the retail
sector remained stable with an increase in the north side
of Riyadh due to major expansions.
Average Rentals for traditional retail showrooms
escalated by around 5% in different areas of the city.
The shopping malls and strip retail center’s rentals
witnessed an overall increase of 7% to 10% in different
areas of the city. This increase was minimal in south of
the city, while a healthy increase in rentals have been
witnessed in north and east of the city.
Rental rates of strip retail ranges between SR 900 per
square meter to SR 2,000 per square meter in Northern
areas of Riyadh.
Riyadh North and East will host most of the upcoming
retail supply, while Western areas are lacking in good
quality retail space.

Average per sqm

Current Retail Future Supply
Vacancy Rate Rents in Strip Retail
Retail Space (sqm) (2015-2016) (sqm)
Centers
Market Trends
2,700,000 10% - 15% 500,000 SR 1000 – SR 2100

Market Trends
22 Retail RIYADH REAL ESTATE MARKET OVERVIEW

Showroom Rental Rates (SR/sqm) (Outside Malls)

2,500

2,000

1,500

1,000

500

Min Max

Showroom Rental Rates - H2 2014 (SR/SQM)

Area Min Max Otman bin Affan Road 750 1,100
Riyadh East Al Khair Road 750 825
Eastern Ring Road 900 1,200 Olaya Road 900 1,500
Khurais Road 700 875 Riyadh South
Dammam Road 700 1,100 Kharj Road 475 650
Sheik Hassan bin 650 800 Al-Aziziyah Road 475 600
Hussain bin Ali Road Dirab Road 450 500
Khalid Bin Waleed 800 1,000 Southern Ring Road 700 900
Road
An Nasr Road 475 575
Omar Bin Abdulaziz 900 1,100
Road Al-Swaidi Al-Aam Road 525 600
King Abdullah Road 950 1,150 Hamzah bin Abdul Mutlib 725 900
Road
Imam Saud bin Abdul 750 900
Aziz Road Ayesha bint Abu Bakkar 750 925
Road
Prince Bandar Bin 650 750
Abdulaziz Riyadh Central
Al Imam Asshafi Road 600 700 King Fahad Road 1,600 2,200
Riyadh West Olaya Road 1,850 2,100
Prince Mohammad bin 2,000 2,400
Western Ring Road 675 900
Abdul Aziz Road (Tahlia)
Al-Wadi Road 575 700
Oroba Street 1,200 1,400
Madina Al-Munawrah 900 1,050
Al Takhasusi Road 1,000 1,300
Road
King Abdul Aziz Road 1,300 1,500
Prince Mashal bin 575 750
Abdul Aziz Road Dabbab Street 1,300 1,450

Riyadh North King Abdullah Road 1,075 1,350

King Fahad Road 1,200 1,400 Makkah Road 1,100 1,500

Northern Ring Road 1,100 1,350 Prince Sultan Street 1,300 1,600

Imam Saud bin Faisal 675 850 Imam Saud bin Abdul Aziz 1,100 1,300
Road Road

Anas bin Malik Road 850 1,050 Moosa Bin Naseer Road 1,000 1,200

King Abdul Aziz Road 950 1,100 Salah-U-Din Road Malaz 975 1,100

Abu Bakr Siddique 725 1,100 Al Hasa Road 800 950

Road Al Nahda Road 900 1,100
 RIYADH REAL ESTATE MARKET OVERVIEW 23

Riyadh Hospitality Market

Overview
24 Hospitality RIYADH REAL ESTATE MARKET OVERVIEW
Riyadh Hospitality Market
Overview
As compared to other real estate sectors, KSA’s
hospitality sector is continuously growing. During 2014,
hotels occupancy rate was around 58% and is expected
to remain stable over the next year. However, a slight
decrease of 5% has been noted for Average Daily Rates
(ADR) in Riyadh.
Based on recent reports, 17,135 rooms are under
construction all over KSA out of which Riyadh holds
5,491 rooms with 32% share. Currently, Riyadh hold 5
% of total number of Furnished Apartment Units (FAU)
and hotel rooms in KSA and a large number of hotels in
4 and 5 star classifications are under construction.
The initiatives being taken by the government including
plans of airport expansion & developments to boost
overall passenger capacity; this will significantly
increase business travellers and the flow of domestic
tourists. Saudi Commission for Tourism and Antiquities
(SCTA) has announced plans to expand the hospitality
sector, with a further 35,000 hotel rooms planned across
the Kingdom over the next five years.
Supply
Century21Saudi witnessed a supply increase in the
hotel sector, however overall occupancy rates dropped
slightly and average daily rates remain under downward
pressure. Hotel supply was in a state of stability during
2013, however during 2014 the key additions in Riyadh
were the opening of Holiday Inn Meydan and Hotel
Kempenski (Burj Rafal; one of the tallest buildings in the
city).
Additionally, in next three years around 3,500 rooms
will enter the Capital’s hospitality market by well-known
brands, includes Hilton, Ibis, Centro, and Radisson Blu
etc.
Wyndham Hotel Group also announced the opening
of “Super 8 hotel” with the addition of 57 keys located
in Thumamah Road. However, Nobu Hotel, & Park
Inn hotel are expected to open in 2015 by a valuable
addition of 135, and 168 rooms respectively. Major
ongoing projects like Gran Melia, Fairmont, Centro &
Hayat Regency are delayed and will be expected to
deliver by 2015 - 2016.
Demand
During the research, Century21Saudi observed that “A
recent report issued by the National Convention and
Exhibition Program (NCEP) revealed that, there are
60 specialized companies planning to hold 226 trade
exhibitions in 2015 in the Kingdom, 50% of which will be
held in Riyadh. According to the report, 31% of exhibitions
are scheduled to take place in hotels, thus these events
will play a pivotal role in order to reshape the hospitality
sector in Riyadh”. The Riyadh metro project, the mega
investment in large-scale railway development to realize
the Capital’s potential as a leading global transport hub.
These investments in infrastructure are likely to boost the
business tourism industry in Riyadh, which will directly
have a positive impact on the hospitality industry.
 RIYADH REAL ESTATE MARKET OVERVIEW
Hospitality 25

Anticipated Supply
Name of Hotel No. of Rooms Opening Year
Fairmont hotel 287 2015
Movenpick Riyadh 445 2015
Hilton Riyadh Hotel & Residence 830 2015
Intercontinental Hotel (KAFD) 218 2016
Nobu Riyadh 135 2015
Hayat Regency 261 2015
Park Inn 168 2015
Centro Riyadh 160 2015
Gran Melia 252 2015
Aloft 281 2015

Market Performance
Century21Saudi observed that the hotels occupancy i.e. SR 935 in 2014 as compared to last year which
was SR 1,025. This caused a reduction in the overall
rate remained at around 58% during 2014. Although
RevPAR.
there has been a slight decline compared to last year
but the overall outlook of the industry is expected to
More than 720 new keys have been added during 2014,
remain stable over the next years.
(Burj Rafal Hotel Kempinski with 349 rooms was the
major openings of 2014).
We observed a slight decrease in ADR Five Star Hotels

Riyadh Hotel Occupancy Rates & ADR

201
1,040 62%
1,020 201
61% 201
1,000
980 60% 201
960 201
59%
940
920 58%
900
57%
880
860 56%
2011 2012 2013 2014 2015 (F)

ADR (SR) Occupancy Rate

Total Inventory Supply in Pipeline Average Daily Rate

Occupancy Rate
Hospitality (Rooms) (Rooms) (5 Star Hotels)
Market Trends
11,085 58% 5,000 – 7,200 SR 935

Market Trends
26 RIYADH REAL ESTATE MARKET OVERVIEW

Riyadh Land Trading

 RIYADH REAL ESTATE MARKET OVERVIEW
Lands 27

Residential Land
In H2- 2014, total 24,748 transactions worth SR 37.4 Century21Saudi did not find any solid evidences to
billion have been done, with a decline of 8% when support the rumors of price decline in the market. When
compared to H2-2013. compared with H2 - 2014 the residential land prices
remained stable in most districts of Riyadh during second
In the last quarter of 2014 (after implementation of 70% half of the year without having any decline.
loan to value restriction) the number of residential land
transactions reduced by 25% when compared Y-O-Y
bases with Q4-2013.

RESIDENTIAL LAND (H2- 2013 VS H2- 2014)

No of Transactions
Month 2013 2014 Change %
July 2,564 3,751 32%
August 2,816 3,477 19%
September 4,706 5,102 8%
October 4,100 2,691 -52%
November 6,174 4,960 -24%
December 6,260 4,767 -31%
TOTAL 26,620 24,748 -8%

Residential Land Sale Prices H2-2014 ( SR/Sq m)

4000

3500

3000

2500

2000

1500

1000

500

Max Min
28 Lands RIYADH REAL ESTATE MARKET OVERVIEW

Average Sale Prices of Residential Lands H2- 2014 (SR/sq m)

Area Min Max Area Min Max

Riyadh East Riyadh South
Qurtaba 2200 2400 Dar Albaiza 900 1,100
Al Monisiyah 1700 2000 Al Aziziah 1,000 1,300
Al Rimal 1450 1500 Al Mansooriah 1,100 1,400
Gharnada & 2200 2600 Al Shifa 1,000 1,250
Alshahda
Badr 900 1,100
Al Hamra 2350 2950
Ahad 700 900
Al Quds 2800 3200
Al Marwah 800 1,200
Al Yarmook 1800 2000
Shabra 1,100 1,500
Al Qadsiah 1600 1800
Al Swaidi 1,300 1,500
Al Ma'eezlah 1250 1450
Al Zahrah 1,300 1,600
Ishbiliah 2200 2400
Al Areeja 900 1,200
Al Nazeem 900 1100
Al Badiah 1,100 1,400
Al Janadriah 1100 1200
Taweeq 900 1,200
Al Salaam 1800 2200
Namar 750 950
Al Naseem (East) 1000 1400
Al Hazm 1,000 1,300
Al Naseem (West) 900 1100
Al Hair 400 600
Al Manar 1600 2000
Al Darehmiah 1,100 1,300
Al Nahdha 1600 1900
Riyadh Center
Al Sulai 1,300 1,600
Al Olaya 2,400 3,000
Al Jazira 1,400 1,800
Al Mazar 2,700 3,500
Al Sa'adah 1,200 1,600 Al Marooj 2,500 3,000
Riyadh West King Fahad 2,500 3,000
Wadi Laban 1,700 2,200 Al Nazha 2,800 3,100
Al Mahdiah 800 1,000 Al Izdhar 2,500 3,000
Al Hada 2,700 3,100 Al Ta'awun 2,400 3,000
Arqa 1,800 2,100 Al Museef 2,200 2,800
Khuzami 3,300 3,800 Salahuddin 2,500 2,800
Nakheel 3,000 4,000 Al Mursalat 2,800 3,000
Zahrah Laban 1,100 1,400 Al Sulaymania 2,500 3,200
Riyadh North Al Warud 2,500 3,000
Al Aarz 1,200 1,500 Al Malaz 2,500 3,200
Al Qeerwan 1,900 2,200 Jarir 2,300 2,900
Al Ghadeer 3,000 3,300 Al Rahmaniyah 2,600 3,000
Al Rabeeh 2,800 3,000 Al Mohammadiyah 3,500 4,000
Al Nada 2,200 2,400 Al Maghrazat 2,600 3,000
Al Nafal 2,100 2,500
Al Wadi 2,200 2,500
Al Yasmeen 2,200 2,500
Al Sahafah 2,200 2,800
Hiteen 3,000 3,800
Al Aqeeq 2,500 2,700
Al Mulqa 2,800 3,500
 RIYADH REAL ESTATE MARKET OVERVIEW
Lands 29

Commercial Land
In H2 - 2014, total 3,381 transactions worth SR 24.5 Century21 did not find any solid evidences to support the
billion have been done, with a growth of 8% when rumors of price decline in the market. When compared
compared to H2 - 2014. with H1- 2014 the commercial land prices remained
stable in most districts of Riyadh during second half of
In the last quarter of 2014 (after implementation of 70% the year without having any decline.
loan to value restriction) the number of residential land
transactions reduced by 7% when compared Y-O-Y
bases with Q4-2013.

COMMERCIAL LAND (H2- 2013 VS H2- 2014)

No of Transactions
Month 2013 2014 Change %
July 333 571 71%
August 310 342 10%
September 587 718 22%
October 456 399 -13%
November 743 622 -16%
December 690 729 6%
TOTAL 3,119 3,381 8%

Commercial Land Sale Prices H2-2014 ( SR/Sq m)

25,000

20,000

15,000

10,000

5,000

Max Min
30 Lands RIYADH REAL ESTATE MARKET OVERVIEW

Commercial Land Sale Prices H2- 2014 ( SR/Sq m)

Area Min Max Area Min Max

Riyadh East Riyadh South
Eastern Ring Road 5,775 7,500 Kharj Road 1,850 2,500
Khurais Road 5,000 6,500 Southern Ring Road 4,500 5,000
Dammam Road 4,200 7,000 Hamzah bin Abdul 3,600 4,500
Mutlib Road
Al shaik Jaber 3,675 4,200
Alahmed Alsabah Ayesha bint Abu 4,000 4,800
Road Bakkar Road
Saad Bin 4,200 4,725 Riyadh Center
Abdulrehman Road King Fahad Road 17,000 22,000
King Abdullah Road 5,000 7,000 Olaya Road 13,000 15,000
Imam Saud bin 4,200 4,725 Prince Mohammad 12,000 15,000
Abdul Aziz Road bin Abdul Aziz Road
Hassan Bin Hussain 5,800 7,000 (Tahlia)
Bin Ali Road Oroba Street 8,000 10,000
Riyadh West Al Takhasusi Road 7,500 9,000
Western Ring Road 4,000 4,700 King Abdul Aziz 7,500 8,000
Madina Al-Munawrah 4,160 4,680 Road
Road Dabbab Street 6,000 6,500
Riyadh North King Abdullah Road 10,000 13,000
King Fahad Road 16,000 18,000 Makkah Road 6,000 7,700
Northern Ring Road 9,000 11,000 Prince Sultan Street 5,500 6,000
Prince Saud bin 4,000 5,000 Imam Saud bin 5,500 6,500
Mohammad bin Abdul Aziz Road
Muqrin Road
Moosa Bin Naseer 4,800 5,500
Anas bin Malik Road 6,800 7,500 Road
Prince Salman bin 6,500 7,500 Salah-U-Din Road 8,000 10,500
Abdul Aziz Road Malaz
King Abdul Aziz 7,000 8,000 Al Hasa Road 4,900 5,500
Road
Al Nahda Road 4,100 5,000
Abu Bakr Siddique 5,000 6,500
Road
Otman bin Affan 4,800 6,000
Road
Al Khair Road 4,800 5,500
Salboukh Road 1,100 1,700
 RIYADH REAL ESTATE MARKET OVERVIEW 31

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Contacts
For Assistance in development & marketing decisions please contact:

Al Waleed Hamd Bin Zoman Eng. Alaa Al-Thagafi Asif Iqbal

General Manager Deputy General Manager Head of Research and Advisory
alwaleed@century21Saudi.com alaat@century21saudi.com asif@century21saudi.com
Mobile: 0555 194 919 Mobile: 0558 199 194 Mobile: 0555 177 076

Disclaimer
In order to prepare this report, Century21 Saudi collected the data from outside sources as well as by survey of Century21 Saudi research team. Century21 Saudi is confident about the
reliability of published data. However, we do not guarantee the completeness and accuracy of the data.

This report is prepared for information only. The assessments and values articulated in this report are subject to change without any notice. Therefore, no investment decision should be
made based on the information presented in this report. Century21 Saudi will not be responsible for any loss that may be sustained as a result of the information enclosed in this report.