Jeddah Saudi Arabia Development Completed-2011
It appears that the majority of mega capital flow for development will go to China, India, and labor from Pakistan which most sources say this is where the crown prince is headed in 2019. Global investors in Saudi are looking to infrastructure, healthcare facilities, airports, luxury retail, and hotels. In the real estate market, the target city is Riyadh and the asset type is apartments up 36% percent year over year. Jeddah is also amongst targeted cities for long term global investors in Saudi. Jeddah is one of the top ports for China’s Belt and Road initiative this will increase employment in the market.
For portfolio managers, the number of listed REITs has double in Saudi over the last 2 years with a market capitalization 2B dollars. Portfolio Managers should target GCC fund and Banks and real estate developers. Also, ETF investments that focus on emerging markets that are weighted for GCC region.Saudi Arabian stocks are about to join major emerging-markets benchmarks, Riyadh stocks have been rallying in anticipation of their inclusion in the gauges, compiled by FTSE Russell and MSCI Inc., in several tranches starting in 2019.
The largest commercial real estate purchase in Saudi for 2018 was by PIF for a $533M lot of land in Neom. Outside China, there is nowhere on earth where such large sums of money are being spent on infrastructure in such a short space of time” February 2019 King Salman begins massive phase in Riyadh a total of 1,281 development projects in the Saudi capital and surrounding towns will cost about SAR82 billion ($22 billion). The multi-billion dollar project aims to enhance crucial infrastructure, such as transportation housing, amenities and improve the environment in an area 315,000 meters.
The program includes: 15 housing projects in Riyadh and its governorates, in line with the objectives of Vision 2030 to increase house ownership among citizens; the establishment of the largest Islamic museum in the capital; a huge environmental project for the lakes south of the capital covering an area of 315,000 square metres; sports cities; seven medical cities; 16 educational projects; quality entertainment facilities; the expansion of airports; and the development and upgrading of the road network.
Investing in Saudi Arabia is investing in US dollar stability. Most people forget the diminishing Saudi oil reserve is tied to their security and the petrodollar which provides the over leveraged standard of living for all Americans. If the portfolio manager considers the fundamentals, demographics, market trends, projects economies of scale, the potential for capital appreciation, risk diversification, value creation, and financial integration. Even after considering the lack of transparency of the legal system and the challenge of informational asymmetries. This makes Saudi Arabia one of the most unique investment opportunities in Asia 2019-2027.The Saudi economy has real GDP with capital reserves and is one most deleveraged(debt free) societies on earth and offers the greatest opportunity for CRE value creation. Saudi is a member of the G-20 and is the 19th largest economy, a member of WTO, great demographics, home of the Grand Mosque, superior industrial infrastructure,25 million travelers yearly and has one of the worlds most stable banking system for inflows and outflows of capital.