The growth in tourist attractions, along with other developments related to entertainment, are expected to improve market performance in Jeddah, according to CBRE.
The current supply in Jeddah, according to CBRE's Jeddah Market Snapshot, stands at 13,760 keys with the expected delivery of another 6,400 keys between now and 2022 - marking a near-50% increase in supply.
Meanwhile, performance metrics are a mixed bag with positive news for the city's ADRs and RevPARs. The former stands between SAR850-1,100 (US$227-293) which marks a 10% year-on-year increase. RevPARs across the city have increased 8% year-on-year, and stand between SAR500-650 ($133-173). Occupancy has dipped slightly (1.4%) year-on-year to between 55-60%.
| Advertisement |
Growth trends are being predicted due to Kingdom-wide initiatives to boost tourism, as well as the introduction of the 'Sharek' (the online visa system) visas to attract tourists.
CBRE predicts that the city’s significance as a leisure destination is expected to increase in line with new entertainment, leisure and F&B offering.
Arabian Business reported that Simon Townsend, head of strategic advisory at CBRE MENAT and general manager, CBRE Saudi Arabia, said: “Saudi Arabia’s recent focus on developing its entertainment sector is already stimulating important growth across a range of sectors including hospitality.
"Large-scale infrastructure including projects such as the Jeddah Opera, the Obhur Bridge and the tram on the Corniche, will further add to the city’s growing reputation as an important cultural, leisure and business hub in the kingdom.
"This market, as witnessed by the entire region, has experienced downward pressures over the last year. However, promising opportunities are consistently arising across all asset classes, and continued investment by the government will only serve to further grow confidence in Saudi Arabia’s real estate sector.”