meed-logo

line1 line2 line3
SIGN IN / REGISTER

GCC strives to reach real estate potential

27 June 2024

 

The real estate sector across the six states that make up the GCC has not yet achieved its full potential when it comes to attracting foreign investment.

This is best illustrated by the region’s largest economy, Saudi Arabia. The kingdom’s Vision 2030 economic diversification strategy includes ambitious targets to increase homeownership among citizens and attract international investors with its recently introduced Premium Residency Visa. The new visa is designed to open up the market to global investors, and while some gains are starting to be made, the market is still at the start of this journey.

Throughout the GCC, real estate markets have demonstrated a degree of resilience and stability following the Covid-19 pandemic, but challenges remain.

Rising borrowing costs and slow-paced reforms have affected the residential sector in the region, although the impact has not been universal. In Kuwait and Saudi Arabia, real estate sales have declined significantly, whereas in Dubai, sales continue apace.

For commercial real estate, the demand for high-quality, sustainable office spaces is a common trend. Businesses are increasingly favouring high-quality Grade A properties, leading to higher rental rates compared to mid- and low-end offices.

The retail sector has benefited from increased consumer activity, particularly during festive seasons. Malls and mixed-use developments have maintained stable rental rates, although some areas, like strip retail rentals, have seen slight declines. This reflects a broader trend of consumer preferences shifting towards more integrated and experiential shopping environments with a keen focus on entertainment.

Meanwhile, the industrial sector has shown robust demand, driven by manufacturing and logistics. High occupancy rates for large and medium-sized warehouses underline the sector’s resilience.

Bahrain 

Bahrain’s property market is performing steadily, driven by strategic homebuyers focusing on mid-range properties, as well as a growing demand for luxury waterfront homes. 

The market’s attractiveness has been enhanced by masterplanned developments such as Bahrain Bay and Diyar Al-Muharraq, which have achieved a critical mass that means they are now perceived as thriving communities rather than ongoing construction projects.

While project completions are important for confidence, in its Q1 2024 market report, property consultant Savills warns that key project completions such as Onyx Residences, Al-Nasseem Phase 2 Villas and Wadi Al-Riffa could lead to a short-term dip in capital values due to oversupply. 

Any possible fall could reverse recent gains. According to Savills, high-end apartment units registered modest 0.3% quarterly growth, averaging BD832 ($2,207.6) a square metre (sq m), while high-end villas have experienced a 4.5% year-on-year decline, averaging BD583/sq m.

Savills reports that the office sector has remained stable, with businesses favouring high-quality Grade A properties, leading to higher rental rates compared to mid- and low-end offices. Demand for Leed-certified spaces and co-working environments is increasing, reflecting environmental, social and governance (ESG) commitments. Grade A properties face mild value corrections due to new developments. 

Retail benefited from festive mall footfalls, keeping rental rates stable for malls and mixed-use developments, while strip retail rentals dropped slightly.

Kuwait

The Kuwait real estate sector continued its dismal performance in 2023 due to rising borrowing costs and the slow pace of ongoing reforms. The volume of transactions saw a significant downturn, according to a report by Marmore, a fully owned research subsidiary of Kuwait Financial Centre, Markaz.

Real estate sales dropped to KD2.1bn ($6.7bn) in the first nine months of 2023, reflecting a 26% year-on-year decline from KD2.8bn ($9.1bn). This downturn has affected all segments of the market.

In the residential sector, sales fell by 26% in Q3 2023, totalling KD1.1bn ($3.6bn), down from KD1.4bn ($4.7bn) in the same period of the previous year. The number of transactions also declined by 34% year-on-year. High house prices and borrowing costs have kept demand muted.

The residential rental segment also decreased by 20% year-on-year, reaching KD666m ($2.2bn) in Q3 2023, down from KD831m ($2.7bn) in Q3 2022. 

The commercial sector experienced a 37% year-on-year drop in sales, to KD321m ($1bn) in 2023, compared to KD511m ($1.6bn) in 2022. The number of transactions in this sector declined by 35% year-on-year. 

In July last year, Kuwait’s National Assembly approved the Housing Development Law and amendments to the Housing and Real Estate Affairs Law that enables private sector involvement – including foreign investment – in developing cities and residential areas, and aims to prevent land monopolies. These measures could positively influence the country’s real estate market this year.

Oman

After a couple of tough years during and immediately following the Covid-19 pandemic, Oman is again capitalising on its real estate potential, with new projects attracting interest from residents and investors.

The sultanate’s real estate market in 2024 is buoyed by a combination of increasing expatriate populations, attractive pricing and favourable government policies. 

A recent report by property consultancy Cavendish Maxwell highlights the contribution of the government’s strategic reforms and investments in infrastructure as critical drivers for the growth of the real estate sector in the country. These have included the easing of foreign ownership restrictions, the introduction of new real estate laws and enhanced regulatory frameworks that have created a more transparent and attractive market for investors.

Longer term, Muscat has set targets for the economy that will support the real estate sector. Under Oman’s Vision 2040 plan, the government aims to attract 11 million visitors annually by 2040, which will boost the tourism industry. Investments in economic zones, renewable energy, manufacturing and tourism projects will contribute to the growth of the construction industry, including the real estate sector.

Oman is developing new projects in response to the long-term opportunities that this growth will create. These include the Sultan Haitham City project to the west of Muscat and a masterplanned mountain development on Jebel Akhdar, launched earlier this year.

Qatar

Following a period of fluctuation around the 2022 Fifa World Cup, Qatar’s real estate market is showing signs of stability, according to Cushman & Wakefield. The number of real estate sales transactions surged by 17.3% in January and February this year compared to the same period in 2023, with an overall value increase of 4.1%.

The declining trend in residential sales transactions seen in 2023, when a drop of 16.2% was recorded compared to 2022, has been reversed in the first two months of this year. Residential sales transactions have increased by 30% compared to the same period last year, reflecting a significant 46% rise in transaction value.

In the rental segment, the early months of 2024 have highlighted a growing disparity between newly constructed residential projects and those built over a decade ago. Tenants are increasingly drawn to modern, well-managed serviced appartments.

Office leasing activity declined in the first quarter of 2024, following a good run at the end of 2023. Over the past six months, more than 70,000 sq m of Grade A office space has been reserved, leading to a decrease in availability in areas including Lusail and Msheireb.

In the first quarter of 2024, hotel room supply in Qatar reached 38,000, which marks a 45% increase in supply over the past five years.

Despite initial concerns of oversupply, Qatar’s hotel industry has experienced a significant boost due to a rise in tourist arrivals since January. Hotel occupancy rates also soared to 84% in January and 85% in February, reaching their highest levels since 2015.

Saudi Arabia

Saudi Arabia’s real estate sector is moving into a new phase as it aims to build on its recent successes and targets foreign investment more proactively.

Real estate forms a key part of the kingdom’s Vision 2030, which aims to increase homeownership by Saudi nationals to 70% by 2030, from 63.7% in 2023. 

The residential real estate market in Saudi Arabia is experiencing robust demand, especially in the major cities of Riyadh, Jeddah and Dammam. In Q1 2024, Riyadh recorded a 77% year-on-year increase in sales transactions, while Jeddah saw a 92.9% rise. This surge in activity underscores the strong appetite for residential properties in these urban centres.

Despite this growth, the market faces challenges such as affordability and a shortage of appropriately priced homes. 

Historically, foreign ownership restrictions have limited international investment in Saudi real estate. However, the new visa scheme signifies a pivotal shift, encouraging a diverse pool of global talents and investors to contribute to the local economy. This move is expected to drive up property values in premium segments and spur the development of luxury real estate projects.

“The real estate market in Saudi Arabia has long anticipated a change in the foreign ownership rules. A significant milestone was reached at the start of the year when a raft of new Premium Residency Visa options were unveiled, including a real estate ownership-linked visa, which is likely to pave the way for international buyers and investors,” says real estate consultancy Knight Frank in its recent Destination Saudi Report.

This move is expected to create supplemental demand from foreign investors that have been waiting for changes in the kingdom’s ownership laws.

Saudi Arabia’s new Premium Residency Visas include a real estate ownership-linked option that is designed to attract foreign investment by allowing non-Saudis to own property worth at least SR4m ($1.1m). 

This policy shift marks a strategic opening up of the market to international investors and affluent expatriates and could potentially boost high-value transactions and increase the demand for luxury residential properties in the kingdom.

One of the early focus areas for new investment inflows could be the holy cities of Mecca and Medina. 

The demand for real estate in Saudi Arabia is also being driven by high-net-worth individuals (HNWI), particularly those from Muslim-majority countries. Surveys indicate that 82% of international HNWI buyers are keen to own real estate in the kingdom, with significant interest in the two holy cities.

These buyers view Saudi Arabia as a good investment opportunity, with cultural and religious reasons also playing a crucial role in their decision-making, Knight Frank says in its Destination Saudi report.

UAE

The UAE’s real estate market started 2024 on a robust note, showing increased activity levels across all sectors during the first quarter, according to the latest report by property consultant CBRE.

The report shows that the total transaction volumes in Dubai’s residential market reached 35,310 in Q1 2024. This is the highest total ever recorded in the first quarter of the year, marking an increase of 20.5% from the previous year. 

Off-plan transactions in Dubai also increased by 23.9%, whereas secondary market transactions rose by 15.2% during the same period.

The CBRE report also outlined that in the first quarter of 2024, Dubai’s residential market witnessed an increase in average prices of 20.7% by March 2024 compared to the previous year.

In Abu Dhabi, average apartment prices rose by 4.3% and villa prices saw an increase of 2.3% during the same period. 

In the commercial sector, the total number of rental registrations in the office sector increased to 46,850, a hike of 35.8% compared to the previous year, according to data from Dubai Land Department.

In Abu Dhabi, an increased activity level in the commercial space sector has taken the occupancy rate to 94% in the first quarter of 2024, up from the 92.5% registered in the same period last year. The increased occupancy levels have led to a growth in rentals, where Prime, Grade A and Grade B rents posted average growth rates of 6.6%, 3.4% and 9.7%, respectively.

The hospitality sector also noted improvement. The number of international visitors to Dubai totalled 5.2 million in the period from January to March 2024, up by 10.2% from a year earlier. The total number of hotel guests in Abu Dhabi stood at 1.3 million, a growth of 22% compared to Q1 2023.

In the retail sector, leasing activity lagged in Abu Dhabi as 7,779 rental contracts were registered in the first quarter of 2024, marking a decline of 8.1% compared to Q1 2023. Dubai witnessed a marginal increase of 0.2% in retail registrations compared to same period last year, recording a total of 23,139.

Finally, the UAE’s industrial and logistics sector also recorded positive leasing activity, with the total number of rental registrations in Abu Dhabi and Dubai increasing by 4.7% and 3.2%, respectively, compared to the same period last year.

Additional reporting by Yasir Iqbal

https://image.digitalinsightresearch.in/uploads/NewsArticle/11985437/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Dubai extends bid deadlines for key drainage projects

    31 October 2025

    Dubai Municipality has extended the bid submission deadlines for two key drainage projects under the $8bn Tasreef programme to develop, rehabilitate and expand Dubai’s stormwater drainage network.

    The first project, listed as TF-05-C1, involves a stormwater drainage system in Jebel Ali and the surrounding areas.

    The new deadline is 10 November, a source close to the project told MEED.

    The project covers approximately 27 kilometres of stormwater network and will serve major transport routes, including Sheikh Zayed Road and Al-Jamayel Road.

    The bid submission date for the tender, was initially 2 October before being extended to 30 October.

    The second project, listed under TF-11-C1,  is for the development of a stormwater pond, evacuation line and pumping station.

    The project includes a comprehensive stormwater drainage system, featuring a tunnel ranging from three to four metres in diameter along Dubai–Al Ain Road and the D54.

    The new deadline is 4 November.

    The bid submission date for the tender, was initially 25 September.

    The schemes are being procured by the municipality’s Sewerage and Recycled Water Projects Department as part of the Tasreef programme.

    In October, Dubai Municipality awarded contracts for two other major projects under the initiative.

    Local firm DeTech Contracting won the main contract for the construction of a stormwater drainage system on Sheikh Mohammed Bin Zayed Road and Al-Yalayis Road in Dubai.

    The municipality alos awarded a contract to Greece/Lebanon-based Archirodon for the construction of the Resilient Future Flow Outfall project. 

    The $25m project involves the construction of a 4-kilometre subsea pipeline with a 2-metre diameter and a discharge capacity of 9 cubic metres a second.

    The Tasreef masterplan that will serve key areas across the emirate, including Nad Al-Hamar, the vicinity of Dubai International airport, Garhoud, Rashidiya, Al-Quoz, Zabeel, Al-Wasl, Jumeirah and Al-Badaa. The initiative aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

    DeTech Consulting previously won the $136m contract to upgrade the West Deira stormwater system.

    This project was the first of the five planned Tasreef projects to enter construction, earlier this year.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14993856/main.jpg
    Mark Dowdall
  • Gas demand reshapes priorities

    31 October 2025

    Commentary
    Colin Foreman
    Editor

    Read the November issue of MEED Business Review

    Gas has increasingly been regarded as a crucial transition fuel over the past decade as governments race to cut carbon emissions and meet climate pledges – including the Paris Agreement’s aim to keep warming well below 2°C and pursue efforts to limit it to 1.5°C.

    Those commitments have driven the demand for liquefied natural gas (LNG) globally and this has reshaped investment priorities across the region, with Qatar, Oman and the UAE eyeing future export growth.

    QatarEnergy’s North Field expansion is the largest investment. The estimated $40bn programme will push Qatar’s LNG output towards 142 million tonnes a year by the end of this decade, almost doubling its present position and consolidating its role as a market anchor.

    Abu Dhabi is also committed to expanding its capacity. Its downstream strategies include a major greenfield LNG terminal at Ruwais, due to enter service in 2028 with two 4.8 million t/y trains adding 9.6 million t/y to the UAE’s export capability.

    These programmes are keeping contractors busy. Over the past five years, more than $44bn of LNG-related contracts have been awarded in the region – which is more than eight times the $5.3bn recorded in the previous five year period.

    At the same time, there are ample opportunities for contractors as other countries in the region build import infrastructure. Projects are already under way in Kuwait, Iraq, Jordan, Egypt, Algeria and Morocco – and more are expected.

    With base load concerns remaining for many countries when it comes to completely switching to renewables, gas is expected to be a fuel of choice for the decades to come. The investments made in production capacity mean the region will play a pivotal role in delivering the world’s energy needs.

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14992876/main.gif
    Colin Foreman
  • Dubai evaluates Al-Maktoum airport substructure bids

    31 October 2025

     

    Dubai Aviation Engineering Projects (DAEP) is evaluating the bids it received from contractors on 15 September for substructure works for the first phase of the expansion of Al-Maktoum International airport.

    “The bid evaluation is ongoing and the project is expected to be awarded by the end of this year,” sources close to the project told MEED.

    MEED understands that the bidders include:

    • Alec (local)
    • China Civil Engineering Construction Corporation (China)
    • China State Construction Engineering Corporation (China)
    • China Harbour Engineering Company (China)
    • Dutco Construction (local)
    • Innovo (local)
    • Limak / PowerChina (Turkiye/China)
    • Shapoorji Pallonji (India)
    • Webuild / Tristar (Italy/local)

    According to an official description on DAEP’s website, the expanded airport’s West Terminal will be a seven-level, 800,000-square-metre facility with an annual capacity of 45 million passengers.

    It will be the second of three terminals at Al-Maktoum International airport, linked to the airside by a 14-station automated people-mover (APM) system.

    In August, MEED exclusively reported that DAEP had received bids from firms to build the APM at Al-Maktoum airport. 

    The system will run under the apron of the entire airfield and the airport’s terminals. It will consist of several tracks, taking passengers from the terminals to the concourses.

    Four underground stations will be built as part of the first phase. The overall plan includes 14 stations across the airport.

    The airport’s construction is planned to be undertaken in three phases. The airport will cover an area of 70 square kilometres (sq km) south of Dubai and will have five parallel runways, five terminal buildings and 400 aircraft gates.

    It will be five times the size of the existing Dubai International airport and will have the world’s largest passenger-handling capacity of 260 million passengers a year. For cargo, it will have the capacity to handle 12 million tonnes a year.

    Construction progress

    Construction on the first phase has already begun. In May, MEED exclusively reported that DAEP had awarded a AED1bn ($272m) deal to UAE firm Binladin Contracting Group to construct the second runway at the airport.

    The enabling works on the terminal are also ongoing and are being undertaken by Abu Dhabi-based Tristar E&C.

    While speaking to the press on the sidelines of the Airport Show in Dubai in May, Khalifa Al-Zaffin, executive chairman of Dubai Aviation City Corporation, said the government of Dubai will award more packages this year, including for the APM and baggage handling systems.

    “Several other packages are expected to be tendered this year, including the terminal substructure, 132kV substations and district cooling plants,” Al-Zaffin said.

    Construction works on the project’s first phase are expected to be completed by 2032.

    The government approved the updated designs and timelines for its largest construction project in April 2024.

    In a statement, the authorities said the plan is for all operations from Dubai International airport to be transferred to Al-Maktoum International within 10 years.

    The statement added that the project will create housing demand for 1 million people around the airport.

    In September last year, MEED exclusively reported that a team comprising Austria’s Coop Himmelb(l)au and Lebanon’s Dar Al-Handasah had been confirmed as the lead masterplanning and design consultants on the expansion of Al-Maktoum airport.

    Project history

    The expansion of Al-Maktoum International, also known as Dubai World Central (DWC), is a long-standing project. It was officially launched in 2014, with a different design from the one approved in April 2024. At that time, it involved building the biggest airport in the world by 2050, with the capacity to handle 255 million passengers a year.

    An initial phase, due to be completed in 2030, involved increasing the airport’s capacity to 130 million passengers a year. The development was to cover an area of 56 sq km.

    Progress on the project slipped as the region grappled with the impact of lower oil prices and Dubai focused on developing the Expo 2020 site. Tendering for work on the project then stalled with the onset of the Covid-19 pandemic in early 2020.

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14991651/main.jpg
    Yasir Iqbal
  • Financial close reached for Jubail-Buraydah link

    31 October 2025

    Register for MEED’s 14-day trial access 

    Saudi Water Partnership Company (SWPC) has announced financial close for the Jubail-Buraydah independent water transmission pipeline (IWTP) project.

    Saudi Arabia’s second IWTP project will link Jubail in the kingdom’s Eastern Province and Buraydah in the Qassim region via a 587-kilometre (km) pipeline that can transmit 650,000 cubic metres a day (cm/d) of water.

    It will have a potable water storage capacity of 1.63 million cubic metres.

    The project will have a total cost of SR8.5bn ($2.2bn).

    A developer team comprising local companies Aljomaih Energy & Water, Nesma Company and Buhur for Investment Company was named as the preferred bidder for the contract last year.

    The Aljomaih, Nesma and Buhur team had proposed to develop the project for SR3.59468 a cubic metre.

    SWPC signed a contract agreement to develop and operate the Jubail-Buraydah IWTP project in May.

    The project is being developed under a build-own-operate-transfer model with a 35-year concession period from the project’s commercial operation date. 

    Local content is expected to reach 45% during the construction phase and 70% during operations.

    Commercial operation is scheduled for the first quarter of 2029.

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14991282/main.jpg
    Mark Dowdall
  • Libya oil project expected to progress despite Petrofac collapse

    31 October 2025

     

    Register for MEED’s 14-day trial access 

    The tender process for Libya’s 6J North Gialo oil field development project is expected to progress following Petrofac’s announcement that it has gone into administration, according to industry sources.

    UK-based Petrofac is one of just two companies that submitted bids for the project. The other is Egypt-based Petrojet.

    In September, MEED revealed that the bids had been submitted for the project and were under evaluation.

    The client on the project is Libya’s Waha Oil Company and Petrofac completed the front-end engineering and design (feed) for the project in 2020.

    Waha is a joint venture of Libya’s National Oil Corporation (NOC), France’s TotalEnergies and US-based ConocoPhillips.

    Commenting on the impact of Petrofac’s insolvency, one industry source said: “This has definitely increased uncertainty for the project.

    “It could potentially mean that this contract is retendered, but there is a lot of confidence that this tender will still go ahead in some form.

    “Waha Oil and Libya’s NOC have made it clear that this project is a priority and they want it to go ahead.

    “Progress is still expected on this tender, but it is possible that there will be more delays before this contract is awarded and signed.”

    The 6J North Gialo field development project is part of a series of tenders that are collectively expected to be worth $1bn.

    The three projects are:

    • NC98
    • Gialo 3
    • 6J North Gialo

    All three projects will develop Libyan reservoirs that have not yet been tapped.

    The 6J North Gialo project was the first to be tendered and it is expected to be followed by NC98, with the Gialo 3 project likely to be tendered last.

    Together, the projects are expected to double Waha’s production from about 300,000 barrels a day (b/d) of oil to 600,000 b/d. The Waha concession covers 13 million acres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14990491/main.png
    Wil Crisp