Mubasher: The office demand in Saudi Arabia’s Dammam Metropolitan Area (DMA) is expected to witness a positive impact in the long run, according to a recent report by JLL on the outlook of the real estate market performance in the kingdom.
This positive impact is ascribed to the efforts exerted by the Saudi government to diversify and develop high-growth industries with megaprojects in the kingdom, including the King Salman Energy Park (SPARK), JLL’s report noted.
Being a major contributor to the kingdom’s oil gross domestic product (GDP), economic diversification within the DMA is important to attract future foreign investment, in addition to stimulating development opportunities.
With approximately SAR 22 billion worth of GDP contribution estimated by 2035, Saudi SPARK’s infrastructure is expected to raise commercial activity, as well as boosting future job opportunities and subsequent office demand.
Associate at JLL MENA Dana Salbak commented: “Megaprojects of this scale are shaping the future performance of Saudi Arabia’s overall real estate market, driving non-oil economic growth as part of Vision 2030. The development of the new energy park is a major step towards increasing economic contribution from different sectors in the industrial and logistics hub of the Kingdom.”
King Salman Energy Park has been developed to position the kingdom as a global energy, industrial, and technology hub, consisting of five main regions focusing on general manufacturing, liquids and chemicals, metal formation, and industrial services.
This milestone project in Saudi Arabia is being developed by Saudi Aramco, inaugurated in December 2018, with the first phase expected to complete in 2021.
Dana Salbak added: “The office market is a key real estate sector set to benefit from the large-scale investments across the DMA. While rents remained under pressure in 2018 because of limited occupier demand this is expected to change in the long-term on the back of Vision 2030 and the government’s commitment to expanding key industrial sectors. This is in turn expected to boost demand for office space.”
