Apartment and villa rents in Jeddah declined 8.3 percent and 5.6 percent year-on-year (YoY) respectively in Q2 2018, real estate consultancy JLL said in a report.
Selling prices for apartments and villas decreased 8.5 percent and 5.6 percent respectively over the past year.
According to the report, the average time required to sell units has increased, causing some developers to delay or downscale projects and others to proceed with caution, the report said.
“The announcement of Jeddah Opera, and the development of cinemas and other cultural and artistic centers will see the entertainment and cultural sectors steadily grow in Jeddah over the coming years, offering opportunities for developers to expand into new sectors”, according to the report.
After a quiet first quarter, there were a number of notable completions in Jeddah during Q2 2018 including two community style properties.
The total supply of residential units reached 817,000 in Q2, with a further 4,000 units expected over the second half of the year, JLL said.
|
Residential Supply |
|
|
Year |
Number of units (‘000 units) |
|
2015 |
789 |
|
2016 |
803 |
|
2017 |
813 |
|
Q2 2018 |
817 |
|
2018 |
817 |
|
2019 |
821 |
|
2020 |
829 |
Office rents in Jeddah retreated 12 percent YoY to SAR 1,055/square meter (sqm) in Q2 2018, compared to SAR 1,202/sqm in the same period last year.
Around 82,000 sqm of gross leasable area (GLA) is expected to enter the market over the second half of the year, the report noted. A further 84,000 sqm is currently under construction and due to be delivered between 2019-2020, assuming no further delays.
|
Office Supply |
|
|
Year |
Gross Leasable Area (mln sqm) |
|
2015 |
0.88 |
|
2016 |
0.97 |
|
2017 |
1.01 |
|
Q2 2018 |
1.03 |
|
2018 |
1.11 |
|
2019 |
1.19 |
|
2020 |
1.20 |
In the retail sector, only one new development was delivered in during Q2 2018, leaving retail supply relatively stable at 1.4 million sqm.
The delay of Jeddah Park has pushed most of this year’s expected retail GLA to 2019, bringing the total expected GLA for 2019 up to 268,000 sqm, and reducing the expected in 2018 down to approximately 59,000 sq m.
According to JLL, the introduction of the white land tax has resulted in a number of new retail projects being proposed around the city, particularly along King Abdul Aziz Road, where there are a number of undeveloped sites that are liable to the tax.
Retail rents remained largely unchanged in Jeddah over Q2 2018. Average rents in regional centers decreased by around 1.8 percent YoY.
|
Retail Supply |
|
|
Year |
Gross Leasable Area (mln sqm) |
|
2015 |
1.24 |
|
2016 |
1.34 |
|
2017 |
1.39 |
|
Q2 2018 |
1.40 |
|
2018 |
1.46 |
|
2019 |
1.73 |
|
2020 |
1.94 |
In the hospitality segment, only one new property entered the market in Q2 2018, with 144 rooms. This opening brought the total supply of quality hotel keys in Jeddah to 11,200.
Occupancies stood at 55 percent in the year to May 2018, dropping 5 percentage points compared to YT May last year. However, average daily rates (ADRs) increased by 7 percent compared to YT May 2017 and reached $239.
|
Hotel Supply |
|
|
Year |
Number of rooms (‘000) |
|
2015 |
8.4 |
|
2016 |
9.6 |
|
2017 |
10.7 |
|
Q2 2018 |
11.2 |
|
2018 |
12.0 |
|
2019 |
14.0 |
|
2020 |
15.1 |
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