Real estate developers must be ready for competition

The market will witness aggressive competition between local and international developers. (Provided)

The real estate market in Saudi Arabia has seen many positive developments following the announcement of the Kingdom’s Vision 2030 and the changing business landscape that Crown Prince Mohammed bin Salman has presented in recent years.
The vision has brought many opportunities for local developers. However, it was also a challenge for them as they now have to keep pace with competitive regulations as a more globalized Saudi market will be open and attractive to international developers and investors.
The main obstacle for local developers, in my opinion, is how they can stay in the market and expand their market share to meet the expected huge demand for real estate projects that would result from the Saudi vision.
More than 95% of local property developers are primitive in their work, Prince Mohammed said in a television interview in April. The old ways of doing business would pose a huge challenge for them to supply the market with high-quality office buildings, as the Kingdom required all foreign companies, which have contracts with the government, to move their headquarters to Saudi Arabia. . This means that the country needs more office buildings to meet international standards to cover the huge demand from foreign companies and investors.

I strongly recommend that international real estate companies enter the Saudi market as soon as they can to secure their place and gain market share.

Khaled Almobid

The market will witness aggressive competition between local and international developers. I think the former have to change their strategy to survive and they can only do that by adopting international standards and practices.
As a result, we will see an increase in real estate projects in Riyadh and newly developed giga-projects, such as Qiddya, Amaala and NEOM. These areas will only house high-quality projects, which means those in Riyadh and elsewhere must satisfy established customers or they will move on to newer giga projects.
Given these assumptions, I think we need a market maker who leads the local real estate market and becomes an industry champion. He must apply higher standards and abilities and lead others to follow the course.
I strongly recommend that international real estate companies enter the Saudi market as soon as they can to secure their place and gain market share. Because it is a growing and promising market that is in its infancy.

• Khaled Almobid is CEO of Menassat Reality Co., a Riyadh-based property developer. Twitter: @khaledalmobid

Disclaimer: The opinions expressed by the authors in this section are their own and do not necessarily reflect the views of Arab News

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