With the rate of expansion and urbanisation, comes the need for cities to adapt to changing market dynamics and occupier demands. In the short to medium-term, urban regeneration will need to play an increasingly important role across Saudi Arabia, acting as a catalyst for real estate markets. The Riyadh Metro (176 km complemented with 24 new bus routes), one of the key infrastructure projects under construction, will be operational in the coming 18 months and its impact on the city is due to be equally wide ranging both in terms of social and economic development.
Key Findings:
The implementation of the Riyadh Metro falls in line with the rapid expansion of population and urbanisation that calls for the establishment of mass transportation systems in the capital.
The opening of the Riyadh Metro is set to help drive real estate demand across the capital as well as reviving neighbourhoods that have historically been classed as secondary locations.
The introduction of the metro may lead to a more permanent outer boundary for Riyadh; therefore, we argue that areas that may have been classed secondary locations historically are set to become future value creation hotspots.
Whilst it is too early to quantify the effect on real estate values, an analysis of international benchmarks shows that mass transit systems have the potential to be a strong driver for growth as a result of improved connectivity.
Whilst there are a number of high profile new developments that are currently taking place across the city, in the longer term we see the success of these projects resting in part on being efficiently connected to the wider urban environment through major infrastructure projects such as the Riyadh Metro.
Raya Majdalani, Research Manager at Knight Frank commented: “the Riyadh Metro is set to have a marked effect in relation to real estate dynamics and the ability to spur meaningful urban regeneration”.
Stefan Burch, Partner, Saudi Arabia concluded: “We see the implementation of the Riyadh Metro as a catalyst for urban regeneration and sustainable development in the capital city. Over the medium to long term, the metro is expected to transform Riyadh for the better, improving the quality of life of local community, a central objective of the Kingdom’s leadership”.
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About:
Knight Frank has a strong presence in the Middle East with offices in Abu Dhabi, Dubai, and Saudi Arabia. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants.
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and together with its New York-based global alliance partner, Newmark Grubb Knight Frank, operate from over 413 offices, in 60 countries, across six continents and has over 14,000 employees. For further information about the Company, please visit www.knightfrank.ae
For further information, please contact:
Raya Majdalani, Research Manager, +971 4 426 7681, Raya.Majdalani@me.knightfrank.com
Taimur Khan, Senior Analyst, +971 4 426 7660, Taimur.Khan@knightfrank.com
Nicola Milton, Head of Middle East Marketing, +971 4 426 7000, Nicola.Milton@me.knightfrank.com
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