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
  • Firms submit Jebel Ali sewage PPP prequalifications

    24 July 2026

     

    Dubai Municipality received statements of qualification on 23 July from firms interested in delivering phase three of the Jebel Ali sewage treatment plant (STP) expansion project.

    Known as DS150/3, the project will be delivered under a public-private partnership (PPP) model on a design, build, finance, own, operate and transfer basis.

    The project involves the development of a new water resource recovery facility with an ultimate treatment capacity of up to 1 million cubic metres a day (cm/d).

    It is being procured through Dubai Municipality’s sewerage and recycled water projects department and will be delivered via a two-stage operational approach over a 30-year concession period.

    It is understood that the following firms are among those likely to qualify for the project:

    • Acciona (Spain)
    • Alkhorayef (Saudi Arabia)
    • Besix (Belgium)
    • Etihad WE (UAE)
    • GS Inima (Spain)
    • Metito (UAE)
    • Miahona (Saudi Arabia) 
    • Samsung E&A (South Korea)
    • Saur (France)
    • Suez (France)
    • Taqa Water Solutions (UAE)
    • Veolia (France)

    The municipality issued a request for qualifications notice in May with an intial bid submission deadline of 18 June. UK-headquartered Deloitte is acting as financial adviser, Aecom is the project's technical adviser and CMS is the legal adviser.

    Dubai Municipality said the project will also include additional land uses and community-focused amenities as part of broader sustainability and urban integration objectives.

    Phase one and two expansion

    On 9 July, firms submitted bids for an engineering, procurement and construction contract covering the expansion of the Jebel Ali STP phases one and two.

    Located on a 670-hectare site in Jebel Ali, the original wastewater facility has a treatment capacity of about 675,000 cm/d, following the completion of phase two in 2019, combining approximately 300,000 cm/d from phase one and 375,000 cm/d from phase two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d, with the expansion estimated to cost $300m.

    UK-headquartered KPMG and UAE-based Tribe Infrastructure are serving as financial advisers on the project.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17735401/main.jpg
    Mark Dowdall
  • Contractors submit interest for Riyadh Expo substructure

    24 July 2026

     

    Contractors have submitted expressions of interest on 23 July for a contract to deliver the early works and substructure works for several assets at the Expo 2030 Riyadh site.

    Expo 2030 Riyadh Company (ERC) is tasked with delivering the Expo 2030 Riyadh venue. Saudi sovereign wealth vehicle, the Public Investment Fund, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for the event.

    The assets include the Icon; the convention centre; and thematic pavilions, including the Culture of Wisdom, Place & Planet and Adaptation & Innovation pavilions.

    The Icon will be located at the entrance of the Expo 2030 Riyadh site, within the Collaboration Precinct.

    The structure will be connected to the metro station and will serve as a gateway to the event.

    It will be 66 metres tall and will comprise an observation platform, food and beverage (F&B) outlets and other features.

    The convention centre will cover about 22,000 square metres. It will be the first point of arrival for visitors to the expo.

    The Culture of Wisdom pavilion will be a 25-metre-tall building that will feature exhibition galleries, innovation laboratories and conference and learning spaces.

    The Place & Planet building will also be 25 metres tall, and will include indoor and outdoor exhibition spaces, F&B and retail facilities and support areas.

    The Adaptation & Innovation pavilion will be located within the Loop of Nations precinct and will comprise a 29-metre-tall building.

    Construction progress

    The tendering of the pavilion structures followed progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor;
    • Lot 2 includes the northern cluster of the Nature Corridor;
    • Lot 3 comprises the southern cluster of the Nature Corridor. 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739044/main.jpg
    Yasir Iqbal
  • Oil price rises above $100 a barrel after Red Sea attacks

    24 July 2026

    Oil prices rose to their highest level in nearly two months on 23 July after the latest escalation in the US-Iran conflict threatened severe new disruptions to global energy supplies.

    Global benchmark Brent crude closed 7% higher, at $100.69 a barrel on 23 July. Earlier in the trading day, it rose as high as $102 a barrel. That is its highest level in eight weeks, since the end of May.

    Brent was trading at over $100 a barrel in the early hours of 24 July, but later pared gains to settle around $99.63 a barrel as of 11am Gulf Standard Time (GST).

    The surge in the Brent price came after Iran-backed Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea following their announcement of a naval blockade on Saudi Arabia.

    It appeared to be the first time since the regional war began that attacks on oil tankers and other commercial ships had extended beyond the Strait of Hormuz, opening up a new front in the volatile conflict.

    The Houthi threat is unsettling to oil markets because millions of barrels a day pass through the Bab El-Mandeb Strait to reach global markets.

    ALSO READ: Opec+ holds the line on unwinding of production cuts

    About 12%-15% of global maritime trade, worth more than $1tn, transits the waterway every year.

    It has also served as an alternative to the Strait of Hormuz, where traffic remains largely at a standstill, with ship crossings falling to single digits on 21 July.

    Since the start of July, oil prices have risen about 35%. Those prices are more than 60% higher than at the start of the year. This has erased much of the progress made in bringing prices down after the US and Iran signed a memorandum of understanding in mid-June.

    The interim peace deal has now collapsed, with US President Donald Trump threatening on 22 July to blow up an Iranian bridge or power plant for every vessel Tehran attacks.

    This was followed by the Houthi claim to have hit two tankers in the Red Sea.

    The UK’s Maritime Trade Office reported a tanker “struck by an unknown projectile” north of the Bab El-Mandeb Strait, and state-run Saudi Press Agency (Spa) reported that a vessel named Encelia was set ablaze by an attack while it was sailing overnight in the Red Sea, citing an unidentified source from the General Authority of Transport. Spa did not mention the other vessel, which is understood to be called Layla.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739553/main4051.jpg
    Indrajit Sen
  • Qiddiya tenders Dragon Ball theme park package

    24 July 2026

     

    Qiddiya Investment Company (QIC) has tendered a contract to undertake the back-of-house works on the Dragon Ball theme park in Qiddiya, Saudi Arabia.

    The scope covers the construction of plant rooms, facilities management buildings, workshops, storage warehouses and central processing kitchens.

    It also includes a monorail service depot, a fire station, parking, utilities and other associated infrastructure.

    The bid submission deadline is 13 September.

    The Dragon Ball theme park will cover more than 500,000 square metres and will have seven themed zones inspired by the Japanese media franchise, including Kame House, Capsule Corporation and Beerus’ Planet.

    The park will offer more than 30 rides with five main attractions, including a rollercoaster that passes through a 70-metre landmark based on the series’ wish-granting dragon Shenron. 

    The development will also include themed hotels.

    In September 2024, US-based firm Falcon’s Creative Group announced that it is undertaking the masterplan and attraction design and is the creative lead for the theme park.

    QIC formally launched the Dragon Ball theme park in March 2024.

    The announcement came after QIC signed an agreement with Japanese firm Toei Animation, the producer of the Dragon Ball anime series.

    The Dragon Ball theme park is one of several major projects within the wider Qiddiya development. Other projects include an e-games arena, Prince Mohammed Bin Salman Stadium, a horse racing venue, a performing arts centre, the Speed Park and Six Flags theme parks and Aquarabia waterpark.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to UK analytics firm GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17738622/main.jpg
    Yasir Iqbal
  • Saudi Arabia appoints developer for hybrid power plant

    24 July 2026

     

    Saudi Arabia-based Lamar Holding has signed a contract to develop a hybrid power plant at the Empty Quarter (Rub Al-Khali) land port in Saudi Arabia, according to a source.

    The public-private partnership (PPP) project aims to reduce diesel fuel use with renewable energy and ensure a long-term power supply at the Empty Quarter land port. It includes the construction of 15MW of total hybrid installed capacity, installation of a 7 megawatt-peak solar photovoltaic system and eight 1MW internal combustion engines.

    In March, MEED exclusively reported that Lamar had been given preferred bidder status and was in advanced discussions with Saudi Arabia’s Zakat, Tax & Customs Authority (Zatca) for the contract.

    MEED understands that the proposed plant will have the capacity to produce 25 gigawatt-hours of electricity annually. It will be implemented under a design, build, finance, operate, maintain and transfer contract model for 25 years, excluding the construction period.

    US/India-based Synergy Consulting is acting as financial advisor to Lamar on the project. Egyptian firm Eternal Consultation Engineering Services is acting as the technical support consultant and Dubai-headquartered Aktech is the technical consultant for the project.

    Lamar Holding and Dubai’s SirajPower submitted bids for the Empty Quarter hybrid power plant project in July 2025, as previously reported by MEED.

    Zatca, in collaboration with the National Centre for Privatisation & PPP, had previously prequalified the following four companies to bid for the contract in October 2024:

    • Alfanar Company (Saudi Arabia)
    • Lamar Holding (Saudi Arabia)
    • Olayan Energy (Saudi Arabia) / Enerwhere Sustainable Energy (UAE)
    • Siraj Power for Renewable Energy (UAE)

    Prior to that, in July 2024, 12 Saudi companies and local branches of international companies, along with 11 overseas-based companies, submitted statements of qualifications for the contract.

    In addition to building and operating the power plant, the project scope includes ensuring the facility operates to defined requirements and output specifications. It also involves managing power generation and the connection to the Zatca interface point for the entire project term.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17733327/main.jpg
    Mark Dowdall