Due to their market value, apartment rentals in high-rise towers are leading Saudi Arabia’s residential real estate sector as the most profitable of real estate branches.
According to experts, apartment rentals’ annual revenues exceed 12% of their total price.
Apartment rental activity in residential towers has surpassed all other real estate activities in the local rental sector, said experts, revealing that the rent for these apartments can reach up to SAR 270,000 annually.
Market data suggests that a return on investment ranging from 8% to 12% annually is considered the most successful percentage to measure the profitability of real estate investments.
The sizes of these residential tower apartments range from 45 square meters to 200 square meters, with prices starting from SAR 1.3 million and reaching up to SAR 3 million.
Prices vary depending on the city, size, location, age of the property, amenities, and proximity to public services and major roads.
Abdullah Al-Obaid, a certified real estate broker with the “Ejar” network, highlights the Saudi real estate market’s ability to diversify its activities and promote various real estate branches from time to time.
This strategy allows it to adapt to the dynamic economic sector with growth, diversity, and competitiveness. He explains that liquidity flows up and down to shift towards the most in-demand branch based on market trends.
Obaid further noted that residential apartment rentals in high-rise towers have dominated the overall activity in the Saudi real estate market, overshadowing the office space rental sector, which experienced significant growth from 2020 until the beginning of 2023.
This shift is attributed to the societal culture and preference for residential apartments, especially in major metropolitan areas, due to limited supply and the changing perception of community living.
Abdulmalik Abdullah, an investor in the high-rise apartment sector, further clarified that there is a higher demand for smaller apartments, with furnished ones being in the greatest demand.
The higher the floor, the greater the demand, he added.
Abdullah also pointed out that shorter lease durations increase the unit’s value, as annual rentals yield less compared to monthly, weekly, and daily rental rates.
