Saudi Arabia witnessed a softer reduction in commercial real estate occupier confidence compared to other countries globally, despite a sharp decline in sentiment due to the COVID-19 pandemic and low oil prices, the Royal Institution of Chartered Surveyors (RICS) said in a recent report.
The report, titled “Q1 2020 RICS Global Commercial Property Monitor”, stated that sentiment towards global real estate has fallen emphatically among both investors and occupiers following the spread of COVID-19.
Globally, confidence among occupiers has deteriorated in the last 3 months in 33 of the 34 countries surveyed.
The same trend is evident among investors too, with confidence deteriorating in all countries.
Saudi Arabia saw a slip in investor confidence as well, with the overall investor demand declining slightly in retail and office sectors.
However, investor enquiries for industrial properties in the Kingdom remained steady over the first quarter. Prime industrial sector is expected to witness a 2% rise in rents in the next 12 months.
Capital value is also expected to rise to some degree in the Kingdom across most areas of the market, led by prime industrial and office values.
“The impact of COVID-19 on sentiment in the commercial property sector was always going to make for painful reading. What’s even more worrying for investors and occupiers alike is that the full extent of the toll it will take on businesses and the underlying economy is still unclear,” Simon Rubinsohn, RICS Chief Economist, said.
He further added that the current environment makes government support more vital to underpin a recovery as lockdowns begin to ease.
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