Expo 2030 seen to bring significant changes in Saudi real estate market: Knight Frank – بوابة أرقام المالية

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The announcement that Riyadh will host World Expo 2030 is expected to bring about significant changes in the local real estate market. The city’s real estate landscape is poised for transformation, driven by Expo-related infrastructure development, experts at Knight Frank told Argaam.

There exists a significant gap in the number of available hotel rooms required to adequately support Expo 2030 with sufficient room capacity. This gap must be reduced in the coming six years, a rather short timeframe to develop the necessary supply. During this period, it is expected to drive overall occupancy rates to new highs. It is important to note that Riyadh already boasts one of the highest occupancy rates not only in the region but also globally. In 2023, Riyadh is ranked among the top cities in the world with the highest occupancy rates, and this trend is projected to persist until 2030 and beyond.

Impact of Expo 2030

Talal Raqaban, Partner, Valuation & Advisory, Knight Frank, said the announcement of Riyadh hosting World Expo 2030 is expected to bring about significant changes in the local real estate market. The city’s real estate landscape is poised for transformation, driven by Expo-related infrastructure development.

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Talal Raqaban – Partner, Valuation & Advisory, KSA

Although those developments were planned previously, it is expected that with this announcement, the plans will further expand. This includes improvements in transportation, utilities, and commercial facilities, leading to increased demand for properties in these evolving districts.

Anticipated trends include a surge in hospitality and tourism-related real estate, particularly in areas near the Expo site, and a boost in the commercial sector as global businesses and investors converge for the event.

Growth in the Real Estate Sector

Potential areas of growth and transformation within the real estate sector are expected to centre around Expo-related developments. This will evolve around the dedicated Expo district, featuring a mix of commercial, residential, and entertainment spaces with a focus on innovative and sustainable practices.

Areas benefiting from new transportation hubs and those strategically positioned for hospitality services are likely to attract real estate investments. Additionally, the emphasis on technology and innovation during the Expo could lead to the growth of dedicated parks and mixed-use developments aligned with these themes, Raqaban added.

Global landscape

Turab Saleem, Partner and Head of Hospitality, Tourism, and Leisure Advisory for MENA, mentioned that in 1990, global tourism arrivals numbered around 435 million. This figure had grown to 1.5 billion by 2019 and is projected to reach 1.8 billion by 2030.

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Turab Saleem – Partner and Head of Hospitality, Tourism and Leisure Advisory – MENA

This substantial increase in overall tourism has placed significant strain on and led to a significant influx of visitors to traditional tourist destinations like Milan, Rome, Paris, Madrid, London, and others. This overcrowding during peak seasons is pressuring the cities’ resources, such as water and electricity, and affecting their cultures and norms. It often makes it challenging for residents to lead their normal lives. However, it also brings prosperity to these destinations, albeit at a cost.

To address the challenge of overcrowding, some cities are reallocating tourism to second- and third-tier cities. This shift is contributing to the rapid development and prosperity of new destinations and providing these countries with new sources of income.

Riyadh currently has only 22,000 available rooms, while during Expo 2020, Dubai had more than 132,000 rooms, highlighting a significant disparity in the accommodation capacity needed to support Expo 2030 adequately. Narrowing down this gap in the next six years is a daunting challenge, given the short timeframe. This situation is expected to drive occupancy rates to unprecedented levels.

Since 2022, Riyadh has been grappling with a shortage of lodging facilities, especially during peak seasons. This shortage is projected to persist until 2030 and even beyond, considering the FIFA World Cup in 2034.

Dubai successfully welcomed over 24 million tourists during the 2020 Expo, and Saudi Arabia aims to elevate the Expo experience. However, there exists a substantial deficiency in lodging facilities.

In total, plans for an additional 290,000 rooms have been announced across the Kingdom of Saudi Arabia (KSA) in the next decade. However, for Riyadh alone, an estimated 60 to 70 thousand rooms are required to effectively host these global events. In conclusion, addressing this accommodation shortfall is essential for the successful execution of these international events.

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