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
  • Algeria tenders 310km Tamanrasset railway

    16 October 2026

     

    Algeria’s state railway project developer, Agence Nationale d’Etudes et de Suivi de la Realisation des Investissements Ferroviaires (Anesrif), has invited national and international contractors to bid for the construction of a 310-kilometre (km) railway line between Hotel Station and Moulay Lahcen Station. 

    The planned line is a key segment of the proposed railway corridor connecting El-Menea, In-Salah and Tamanrasset across the southern wilayas of In-Salah and Tamanrasset.

    The tender notice was issued on 12 October, with bids due by 10 November.

    The tender is open to single contractors and consortiums. To qualify, single firms must have executed at least 200km of new railway lines or track-doubling works since 2010, with accepted project certificates covering sections of at least 100km, along with a cumulative 800 metres of railway bridges with individual spans exceeding 30 metres.

    Bidders must also provide at least two rail-tamping machines, two ballast regulators, and a project director with an engineering degree and at least five years of railway construction management experience.

    From a commercial and classification perspective, single bidders and consortium leaders must hold a category-nine (IX) professional qualification in public works.

    Bidders must also demonstrate an average annual turnover in construction of at least DZ260bn ($1.96bn) across the 2023-2025 financial period.

    For joint ventures, the cumulative turnover of all members must meet the $1.96bn threshold, with the consortium leader accounting for at least $1.3bn.

    Offers must be accompanied by a bid bond exceeding 1% of the total bid value for submissions exceeding $7.4m, with proposals remaining valid for 90 days beyond the submission date.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20665591/main.jpg
    Yasir Iqbal
  • Joint venture wins $246m RCRC bridges contract

    16 October 2026

     

    A joint venture of local contractor Mofarreh Group and Turkey-based Gulsan Holding has won an estimated SR923m ($246m) contract from the Royal Commission for Riyadh City (RCRC) to construct a series of grade-separated steel flyovers across the capital.

    The contract, known as Package 2 (Groups 2 and 3), is part of RCRC’s urgent bridges programme under the wider project to build steel bridges at 10 junctions across Riyadh.

    The works have a 12-month execution timeline to fast-track traffic decongestion across major arterial corridors.

    The joint venture’s scope covers the engineering and construction of grade-separated steel bridge interchanges across seven key intersections:

    • IC04: Al-Khair Road and King Salman Bin Abdulaziz Road
    • IC05: Prince Turki Road and Imam Saud Road
    • IC06: Al-Takhassosi Road and Saeed Al-Sulami Road
    • IC07: Khurais Road and Al-Hareth Bin Abdullah Road
    • IC08: Khurais Road and Ash-Sharq Road
    • IC09: Khurais Road and Marmar Road
    • IC10: Al-Kharj Road and Al-Hilla Road

    The total length of the flyovers is 8.86 kilometres, excluding Junction IC10.

    In addition to the structural steel superstructures, concrete bridge foundations, decks and approach ramps, the contract includes retaining walls, utility diversions, temporary phased traffic arrangements, associated roadworks, drainage networks, roadway lighting, intelligent transportation systems and landscaping.

    The client received commercial proposals from several local and international contractors. Other bidders included:

    • Masco
    • Nesma & Partners
    • Al-Omaier Trading & Contracting Company 
    • Yuksel Saudia 
    • Batco 
    • Modern Building Leaders
    • Sapac

    The urgent bridges initiative is part of Riyadh’s rapid transport infrastructure programme to improve traffic throughput, enhance safety and ease vehicular congestion across central and ring-road corridors ahead of major events, including Expo 2030 and the 2034 Fifa World Cup.

    In July, Mofarreh Group and Turkiye’s Gulsan Holding formed a joint venture to bid for and deliver transport infrastructure projects in Riyadh for RCRC.

    The joint venture said it will target road, bridge, viaduct and interchange projects.

    Mofarreh will provide local market access and operational capacity, while Gulsan will contribute international experience in large-scale transport projects.

    The companies said the new venture will support knowledge transfer and localisation, and promote the use of international engineering and construction standards aligned with Saudi Arabia’s Vision 2030 infrastructure and sustainability goals.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20663255/main.png
    Yasir Iqbal
  • Humain tenders 100MW Riyadh AI data centre

    16 October 2026

     

    Register for MEED’s 14-day trial access 

    Saudi artificial intelligence infrastructure developer Humain has issued a request for proposals for an engineering, procurement and construction (EPC) contract to deliver a 100MW artificial intelligence (AI) data centre facility in Riyadh’s Al-Saad area.

    The tender was issued on 17 September, with bids due by 8 November.

    The contract includes core-and-shell works; civil works; mechanical, electrical and plumbing installation; testing and commissioning; and site infrastructure across a 350,200-square-metre plot.

    The project also includes an optional expansion phase that could raise total site capacity to 200MW.

    The initial 100MW development is split into two equal 50MW phases, structured across two single-storey IT buildings housing four 25MW data halls.

    Phase one targets a ready-for-service date by October 2028, followed by phase two in January 2029.

    Under the optional phase three, an additional 100MW facility would be brought online by July 2029.

    The data centre will be designed to support high-density graphics processing unit clusters and AI-compute workloads, with rack densities of 240kW to 250kW.

    The facility will be built to Uptime Institute Tier III topology and LEED Silver standards as a baseline, targeting LEED Gold.

    The operational design targets an annualised power usage effectiveness below 1.35.

    Power will be delivered through four 33kV connections supplied by Saudi Electricity Company from two separate high-voltage/medium-voltage primary substations. The scope requires 15 transformers, 15 static 2,250kW IT uninterruptible power supply (UPS) units, and 450kW mechanical UPS systems with lithium-ion battery storage for each 25MW block. 

    Backup emergency diesel generators will be provided on an owner-furnished, contractor-installed basis, with the EPC contractor handling their installation, connection and testing. Fuel storage will provide 24 hours of autonomous run-time, split between on-site underground bulk tanks and generator belly tanks.

    Thermal management combines air and liquid cooling. High-density server racks will be equipped with direct-to-chip liquid cooling loops using coolant distribution units and technical water distribution, paired with air-cooled chillers operating in dual high- and low-temperature loops, alongside fan-wall units.

    The total construction timeline is capped at 25 months from site handover or contract signing, with pre-execution early mobilisation scheduled to start in January 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20661045/main.jpg
    Yasir Iqbal
  • Adnoc Onshore seeks bids for Bu Hasa field EOR project

    16 October 2026

     

    Register for MEED’s 14-day trial access 

    The onshore oil and gas business of Abu Dhabi National Oil Company (Adnoc Onshore) has sought bids from contractors for a key project to increase the oil production capacity of the Bu Hasa oil field, primarily through enhanced oil recovery (EOR) techniques.

    The main objective of the Bu Hasa-Shuaiba EOR Unit 1 (Phase 1) project is to achieve a targeted 70% increase in oil production, extend the Bu Hasa field development’s production plateau and maximise the field’s potential in an economical manner.

    The project aims to confirm and validate the optimum EOR technology for the top-ranked reservoirs/units; assess incremental recovery on top of the improved oil recovery (IOR) wedge; extend the field plateau for as long as is economically feasible; and achieve an ultimate recovery factor of 70% from the Shuaiba reservoir. It will evaluate and execute the recommended EOR option through pattern phasing for any technology proven by Adnoc.

    Adnoc Onshore is understood to have issued the tender for the project on 20 September, with an initial technical bid submission deadline of 8 October, according to sources. The client later extended the technical bid submission deadline to 17 October, sources told MEED.

    The chosen contractor will execute the project under a hybrid contracting strategy comprising:

    • A lump sum (turnkey) EPC scope covering the complete pipeline system from East Hub to the separation plant
    • A call-out-based scope for execution of all WAG injector and WSW tie-in works

    Unless otherwise specified, all activities defined under the contractor’s scope will be deemed included within the lump-sum contract price. This will cover engineering, procurement, construction, testing, pre-commissioning and support to commissioning for a complete and operable system.

    At the Bu Hasa field development, three remote degassing stations (RDS-1/2/3) and two satellite stations, Bida Al-Qemzan and Huwaila, are currently in operation. Production from oil wells completed in Shuaiba, Thamama B, Thamama F, Bida Al-Qemzan and Huwaila is routed via individual flowlines to the three remote degassing stations and the Bida Al-Qemzan and Huwaila stations across different parts of the field.

    Combined production from the wells at each of these stations is routed to the central degassing stations (CDS) via transfer lines ranging from 16 inches to 24 inches in diameter. In addition, some wells in the central part of the field are connected directly to the CDS.

    Previous studies have identified carbon dioxide (CO2) flooding as a promising tertiary recovery mechanism in the Shuaiba reservoir, delivering incremental recovery on top of the IOR wedge (P5 project), extending the field plateau as long as economically feasible, and achieving an ultimate recovery factor of 70% from the Bu Hasa Shuaiba units.

    Located 200 kilometres south of Abu Dhabi city, Bu Hasa is Adnoc Onshore’s westernmost producing field. It is one of Abu Dhabi's biggest onshore assets, with crude oil production capacity of 650,000 b/d. It is also one of the Adnoc Group’s oldest oil fields, having been discovered in 1962 and in production since May 1965.

    As part of the ongoing Bu Hasa Integrated Field Development Project (BUIFDP), 13 new well pads and two pad hubs have been added to the field. Oil, gas and water produced at these sites will be collected at a central gathering facility, then sent through production headers and transfer lines to the CDS for processing.

    Adnoc Onshore is the Adnoc Group’s largest oil-producing subsidiary, accounting for 2 million b/d of oil and about 7 billion cubic feet a day of associated gas production from four main onshore field developments in Abu Dhabi: Bab, Bu Hasa, North East Bab and South East.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20639750/main0548.jpg
    Indrajit Sen
  • OTTCO issues tender for Oman oil storage park expansion

    16 October 2026

     

    Register for MEED’s 14-day trial access 

    Oman Tank Terminal Company (OTTCO) has issued the main tender for a major project related to the expansion of the Ras Markaz crude oil storage complex at Duqm, on the sultanate’s Arabian Sea coast.

    The project, titled Trade Bridge, involves the engineering, procurement and construction (EPC) of eight large storage tanks, each with a capacity of 650,000 barrels. This will increase the Ras Markaz terminal’s total storage capacity by 5.2 million barrels.

    The project represents the next expansion phase (phase 1.4) of the Ras Markaz oil storage terminal within the Special Economic Zone at Duqm (Sezad).

    State-owned OTTCO issued the prequalification notice for the project on 28 July, with contractors submitting initial responses by 4 August and final responses by 19 August, MEED previously reported.

    According to sources, OTTCO issued the main tender for EPC works on Project Trade Bridge in the weeks following completion of the prequalification exercise.

    The following contractors, among others, are understood to have been prequalified by OTTCO to bid for Project Trade Bridge:

    • China Petroleum Pipeline Engineering Company (China)
    • China Tianchen Engineering Corporation (China)
    • Daqing Oilfield Construction Group Company (China)
    • Enppi Muscat (local branch of Egypt-based Enppi)
    • Gulf Petrochemical Services & Trading (Oman)
    • Hualu Engineering & Technology Company (China)
    • Rotary Engineering (Singapore)
    • Sinopec Ningbo Engineering Company (China)

    OTTCO commissioned the first phase of the Ras Markaz crude oil storage park, covering 10 square kilometres and with a capacity of 26.7 million barrels, in December 2022.

    The storage facility has two parts. The first is a marine services area, which includes a floating station for crude imports and exports. This zone is about 7 kilometres offshore and is connected via two 42-inch pipelines and associated facilities.

    In water depths of up to 42 metres, the floating station can accommodate very large crude carriers. It is linked to four main pumps that transfer crude oil to the storage area, which is located more than 120 metres above sea level. OTTCO could add pumps at a later stage to keep pace with future demand for oil storage.

    The second part of the storage facility features oil pumping systems, water treatment facilities, reservoirs, power station networks and other associated systems.

    Region’s largest oil storage park

    OTTCO will build the Ras Markaz oil storage facility in five phases over several years across an area of about 40 square kilometres, for which it signed a land agreement with Sezad in July 2017.

    It will be able to hold 200 million barrels of crude a year. Total investment in the scheme is understood to be $5.2bn.

    The storage terminal in the first phase of the Ras Markaz facility is connected to the estimated $7bn Duqm refinery and other oil-derivatives production plants at Sezad via a pipeline that will supply crude feedstock to the refinery when required.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20638090/main0749.jpg
    Indrajit Sen