Economic View

On creating investment opportunities and fostering sustainable infrastructure development

What are your expectations regarding demand for luxury real estate in Saudi Arabia?

VINCENT MICCOLIS: The Kingdom has undertaken significant economic and social reforms in line with Vision 2030, which has opened opportunities for investment and development. The government is actively promoting the growth of the real estate sector and has implemented several policies to encourage foreign investment. Consequently, Saudi Arabia is attracting attention from international investors.

Furthermore, demand for luxury real estate is expected to grow substantially in the coming years, driven by infrastructure projects such as NEOM, a $400bn new city being constructed in the north; Qiddiya entertainment city outside Riyadh; and New Murabba, a modern downtown being developed in Riyadh. These projects are transforming the landscape by creating new urban centres.

In what ways could partnerships be deepened between international and domestic players to accelerate development in the local real estate market?

MICCOLIS: The government supports foreign investors by providing infrastructure and incentives, such economic free zones that offer tax breaks and streamlined regulatory processes. The government aims to work constructively with international developers to identify and pursue new real estate opportunities – particularly in emerging markets, including numerous giga-projects in the Kingdom’s development pipeline.

It will be important for the government to continue promoting transparency and clarity in the regulatory environment to build investor confidence. Efforts towards this end include the creation of predictable and stable regulatory frameworks, and the enhancement of transparency in areas such as land ownership and property rights registration. It will also be key for the public sector to engage in proactive outreach efforts to attract investors and key stakeholders by highlighting the opportunities available in the country’s developing real estate market.

To what degree can cost-saving mechanisms help private companies limit the impact of rising costs and inflation in the local market?

MICCOLIS: Private businesses and organisations operating in real estate can explore alternative avenues such as modular or prefabricated construction, which can help to reduce costs and streamline construction processes. Additionally, prioritising sustainable and energy-efficient building designs, as well as incorporating innovative technologies, can reduce operating costs in the long term.

Companies can also explore alternative financing models, such as public-private partnerships or Islamic finance, to achieve more flexibility and lower costs. Lastly, it is essential for businesses to adopt innovative property management and marketing strategies to maximise occupancy rates and rental income.

How do you view the role of large-scale infrastructure and real estate projects in strengthening Saudi Arabia’s financial and business ecosystems, and how might these help enhance the Kingdom’s attractiveness as an investment destination?

MICCOLIS: Large-scale infrastructure developments such as The Red Sea Project and the Diriyah gate project are set to strengthen the Kingdom’s financial and business ecosystems by creating economic opportunities, stimulating job growth for young Saudis and attracting foreign investment. These projects can play a pivotal role in diversifying the economy and reducing Saudi Arabia’s reliance on oil revenue while enhancing its competitiveness as an ideal destination for investors. The planned giga-projects can also improve the overall quality of life for residents by providing housing, transport and leisure options.

These projects act as a catalyst for growth in other sectors of the economy – including construction, engineering, architecture and hospitality – creating a multiplier effect that generates additional economic activity and employment opportunities. These initiatives will play a pivotal role in Saudi Arabia’s long-term economic development strategies and are critical to the country’s continued growth and prosperity.

To what extent does the growing global emphasis on sustainability affect real estate in Saudi Arabia?

MICCOLIS: Saudi Arabia has made strides in the promotion of sustainability and the reduction of its carbon footprint in recent years. Developers and operators are increasingly incorporating sustainable design and construction best practices – such as energy-efficient building systems, renewable energy and sustainable materials – in their projects. These efforts aim to reduce the environmental impact of new developments, and generate cost savings for building owners and tenants.

As awareness about sustainability increases among investors and consumers, demand for environmentally conscious property investments continues to rise. This trend is particularly prominent among institutional investors, who incorporate environmental, social and governance factors in their decision-making processes. In response to such demand, we collaborate with local partners to develop sustainable products that meet the evolving needs of the market.

The growing global emphasis on sustainability will continue to have a substantial impact on real estate in the Kingdom, as developers and investors increasingly recognise the importance of creating long-term value and promoting economic growth within the sector.