A report from CBRE has predicted that entertainment and tourism sectors in Saudi Arabia will stimulate growth in the real estate industry, with 26 million visitors expected by 2023.
Real estate advisor CBRE, which began operations in Saudi this year, published the whitepaper this month. They predict that public and private investments will fuel growth as the country tries to reduce its reliance on oil. 40% of entertainment plans will be funded by private sector.
The entertainment sector is expected to generate 300,000 jobs by 2020. Drivers for growth include reformations to laws, including changes to reduce the time it takes to obtain business visas. The country has also lifted their ban on cinemas, and more than 350 cinemas are forecast to open by 2030.
With more than 60% of the country’s population under 35, the younger generation are a key demographic that can be encouraged to stay at in the Kingdom rather than go abroad for entertainment.
Retailtainment is likely to be a key area of potential growth as mall owners react to entertainment reforms by installing cinemas and complimentary tenants. Differentiation of entertainment offerings will be important in a period of rapid growth.
Tourism is expected to increase with CBRE forecasting visitor figures at 26 million by 2023, thanks to the introduction of tourist visas as well as developments associated with Vision 2030.
There are 4 “giga projects” currently under construction in Saudi: Qiddiya, Al-Ula, Neom and the Red Sea Project. In September the Public Investment Fund announced a new uber-luxury resort called Amaala.
Saudi Arabia is moving ahead with the projects, despite controversy surrounding the death of journalist Jamal Khashoggi.
Saudi market set for growth
Simon Townsend, General Manager (KSA) and Head of Strategic Advisory, CBRE MENAT, said: “The Saudi market is set for growth, with key projects including 16 entertainment complexes, an aquatic center and three additional leisure hubs scheduled for completion by 2030. The entertainment sector is a game changer for the Kingdom. Previously untapped, it presents an abundance of opportunities for foreign investors who are eager to enter the Saudi market. These impressive plans highlight the ambitious vision of the Saudi Government, and CBRE is committed to supporting this growth in any way it can.”
“We are dedicated to continuing to expand our presence in the country and to working with our clients to attract local and international investors, as well as to cultivate partnerships with international entertainment corporations, all which will be essential in supporting the growth of this extremely important sector.”