Grant of Aid to Airport Operator Complies with Conditions as Stipulated in Article 107 (3) (c) of the Treaty.

Grant of Aid to Airport Operator Complies with Conditions as Stipulated in Article 107 (3) (c) of the Treaty.

Jeddah, Saudi Arabia's second-largest city, is poised for significant growth and transformation in its real estate market over the next decade. Market research companies estimate that the overall Saudi real estate market will grow at a CAGR of around 7-9% by 2030, potentially doubling in market value by the end of the decade.

Jeddah's retail real estate sector is ready to grow but also transform, with new retail formats flourishing: more outdoor lifestyle centers, food and entertainment hubs, and high street retail in mixed-use projects. Expect significant expansion in Jeddah's industrial/logistics sector due to Vision 2030 projects (like new Economic Special Zones and logistics hubs).

The demand for housing in Jeddah is expected to remain robust until 2030. By 2030, Jeddah's homeownership rate is on track to reach 70%. Large-scale government-backed housing projects (like the Roshn communities) will add substantial supply, acting as a buffer against uncontrolled price inflation and keeping housing relatively affordable for locals.

The balance between supply and demand is key; S&P even warned about the risk of oversupply if developers build too much. Rents may experience slower growth periods with the arrival of new stock (especially apartments); it's possible there could be a slight increase in vacancy mid-decade, which may moderate rent increases. We expect rental yields to stabilize in the 6-8% range for residential properties, which is attractive for investors.

Jeddah's office market is expected to expand moderately due to the diversification of the economy and new private companies. By 2030, Jeddah will add several hundred thousand square meters of office space, including in mixed-use areas like Jeddah Central and along northern corridors. Investors find this segment attractive due to relatively high yields and long-term leases with reputable tenants.

Prime logistics warehouse/center rents may approach Riyadh levels by 2030 (reaching SAR 300-400/m2/year for top warehouses) given strong market appetite. The completion of the Landbridge railway (possibly by 2030) will make Jeddah the country's primary import and export channel, meaning demand for warehouses/depots will surge.

Jeddah's hotel sector will likely see a significant increase in room supply, including the 2,700 rooms in Jeddah Central. By 2030, Jeddah could consolidate as the Red Sea's primary logistics hub, with modern distribution centers serving not only Saudi Arabia but also African and regional markets, thanks to its port and airport.

Occupancy rates may vary with global travel trends, but the overall trajectory indicates more tourists - both religious (as Umrah visas become easier and valid year-round) and leisure (with Red Sea tourism growing, many will pass through Jeddah).

Jeddah's retail rents in prime locations should rise modestly (perhaps ~3% per year on average), but secondary retail may face challenges if e-commerce grows faster or there's excessive mall competition. With the diversification of the economy, new private companies (e.g., logistics, tourism, fintech) are establishing themselves in the city, increasing demand for office space.

While not explicitly asked, it's worth noting Jeddah's hotel sector in our forecast, as the 2030 Vision's tourism goals directly impact it. By 2030, Jeddah's skyline will be notably different - many of the 17,000 units in Jeddah Central will be delivered, new skyscrapers will mark the Corniche, and planned northern suburbs will be largely completed.

In conclusion, the Jeddah real estate market between 2025 and 2030 is forecasted to offer substantial growth and income opportunities, especially in coastal luxury developments and projects benefiting from new infrastructure. However, investors and developers must carefully manage risks related to construction costs, market segment balance, economic sensitivities, and large project complexities to maximize returns in this dynamic environment.

Investors might find attractive opportunities in the expanding industrial/logistics sector, as Vision 2030 projects could lead to significant growth in this segment. Additionally, the technological sector, such as fintech and e-commerce, is expected to establish itself in Jeddah, potentially increasing demand for office space.

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