- Investors worldwide are increasingly drawn to Saudi Arabia as a lucrative destination for high net-worth individuals (HNWIs).
- HNWIs are entering the Saudi real estate market due to its resemblance to the Dubai real estate market of 15 to 20 years ago.
- Saudi Arabia offers excellent opportunities for making money, with billion-dollar investments available each year.
After a good first quarter of FY 2023, industry experts believe that Saudi Arabia’s real estate sector is transitioning into a substantial and sustained expansion period, mimicking that of the Dubai real estate market of 15 to 20 years ago.
The commercial real estate firm Strata has stated that it plans to invest in the Saudi real estate market, estimating market opportunities for annual billion-dollar investments.
Strata predicts around 18-20% in returns over the next five years. However, Sudarshan Lodha, CEO of Strata, estimates that the returns may be considerably greater.
Experts in the industry generally believe that the Saudi real estate sector has reached a critical juncture, primed for a massive surge in real estate purchases from overseas HNWIs looking to invest in a second long-term residence.
Lodha suggests that Strata's aim is to make an ambitious entry into the GCC market through a proposed base in Saudi Arabia.
Strata also stated that it is considering launching new funds of between $100m and $200m for its initial investments in Saudi Arabia and the surrounding area, thus offering HNWIs opportunities to purchase both investment properties and second-home real estate.
Lodha also said that Saudi Arabia presents immense potential for wealth creation, and investors are entering the Saudi real estate market because it is forecast to yield profitable returns.
HNWIs are drawn to the country due to its warm climate and luxurious architecture not dissimilar to the that found in Dubai, which has a booming property market.
HNWIs looking to Saudi Arabia to purchase second-home real estate should ensure that they use safe money transfer methods.
The Saudi government has mandated that overseas companies must establish their regional headquarters in the country to be eligible to bid for businesses and contracts, which has the potential to attract HNWIs looking to live and invest in the Saudi market.
The country’s stock market has seen a surge in activity due to big-ticket listings by well-known corporations, such as Aramco.
Lodha disclosed that Strata has initiated discussions with developers of certain commercial sector undertakings in Saudi Arabia, such as industrial hubs, storage spaces, data centres and office areas.
“Our investors will know exactly where their investments are allocated and can keep track of the progress and market valuations of those investments,” he said.
Wealthy individuals interested in making international payments for luxury real estate should look to Saudi as an attractive location.
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