According to CBRE, short-term demand for housing and real estate, in general, is set to increase as tourism increases. ‘
These promising statistics come in the wake of positive government initiatives, which have caused an increase in the number of tourists to this holy city. The effect has trickled down to real estate sector. A snapshot of Makkah market has revealed the city is growing its residential developments almost everywhere.
According to future projections, it is believed that in the short terms, real estate demand is expected to rise leading to more small-sized units. In addition, the city has decided to redevelop uncontrolled developments in order to improve the lives of the locals.
Hotel owners and operators continue to offer specialized packages and promotions to Umrah and Hajj companies. This is in line with the government’s objective to increase the number of tourists coming to Makkah. The government expects that the number of tourists will reach 30 million in 6 years’ time.
Based on reports by CBRE, the retail demand in Makkah is localized around high-quality destinations. Malls in these areas have continued to experience high rate of occupancy. In addition, rental rates have also gone down within the retail sector.
Most of the players in the rental space in Makkah are government entities as well as companies that deal with Hajj. As the number of tourists continues to increase, so will the number of companies needed to handle growing tourist needs.
However, even with this positive outlook, the rental space has also continued to feel pressure within the main and minor office locations. The rental space rents went down by about 10 percent year on year.
The government will need to overhaul transport and infrastructure in order to handle the increasing demand. Makkah is growing at an alarming rate, so it is crucial that systems are designed to handle the changing needs.