GCC Real Estate Sale Transactions Reaches $143.1 Bn

The Gulf real estate sector witnessed a growth in the value of deals until October of this year, equivalent to the total sales in 2021 (SPA)
The Gulf real estate sector witnessed a growth in the value of deals until October of this year, equivalent to the total sales in 2021 (SPA)
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GCC Real Estate Sale Transactions Reaches $143.1 Bn

The Gulf real estate sector witnessed a growth in the value of deals until October of this year, equivalent to the total sales in 2021 (SPA)
The Gulf real estate sector witnessed a growth in the value of deals until October of this year, equivalent to the total sales in 2021 (SPA)

Real estate sale transactions in the GCC over Jan-Oct 2022 reached $143.1 billion, eclipsing the full-year figure of 2021, which was $136.9 billion.

According to Kuwait-based KAMCO Investment Company, the total value of the region was nearly 21 percent higher year-on-year compared to the corresponding period from January to October 2021.

The higher transaction activity was driven by value transacted in Dubai that increased almost 81 percent year-on-year over the period, supported by solid demand and price gains witnessed by luxury residential properties and healthy revenues in the affordable segment.

The report, of which Asharq Al-Awsat obtained a copy, stated that the number of transactions in the GCC declined by six percent over Jan-Oct 2022 to 511,239 deals despite a jump of over 61 percent witnessed in Dubai, as other markets such as Saudi Arabia, Qatar, and Kuwait saw the lower activity as compared to the same period in 2021.

The average value per transaction achieved for markets such as Saudi Arabia (+35.5 percent) and Dubai (+12.2 percent) was significantly higher, pointing toward end-user solid demand and investment appetite.

"We reiterate that 2022 will be the new base year for the office real estate demand for both new and existing stock of office spaces. Separately, temperature-controlled spaces, chilled centers, and bonded warehouses continue to command premiums of at least 25 percent -30 percent at the top end of the industrial warehouse market," KAMCO says.

All real estate sub-segments in the GCC have performed better in 2022 than in 2021, with residential and quality industrial warehouses witnessing reasonable price and rental increases.

Office supply tailored towards newer sources of demand such as robotics, IT, and healthcare will continue to see faster take-up of such spaces.

The strong NOI (net operating income) performance across sub-segments combined with the twin risks of further interest rate hikes and a prolonged period of high rates could have pushed real estate assets in specific geographies into a late-stage expansion phase, says the report.

"Nevertheless, developers remain cautious of these trends and are expected to announce project launches likely to cater to a more normalized demand environment going forward."

Investor sentiment gained momentum in 2022 and resulted in opportunistic buying in select GCC markets and residential product types, similar to trends in 2021. As a result, prices rose across markets such as Dubai (+9 percent) and Jeddah (+20 percent) at the end of Q3-2022, as per JLL.

Developers continue to provide more flexible payment plans with lower down payments and post-completion plans to attract off-plan and first-time buyers, while catalysts and product demand differ across various GCC markets.

According to the report, Saudi residential sector demand would continue to be driven by Vision 2030's target of increasing home ownership to 70 percent by the end of the decade, and as of mid-2022, the Saudi Real Estate Refinance Company estimates home ownership to have reached above 60 percent.

However, rising interest rates resulted in lower offtake of mortgages, as the number of mortgages over Jan-Oct 2022 declined almost 17 percent.



Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
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Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)

Severe wildfire seasons are increasingly hurting western Canada's lucrative tourism industry, with some visitors beginning to avoid the busy late-summer months due to concerns about uncontrolled blazes, smoke-filled skies and road closures.

After a scorching start to July, nearly 600 wildfires are now ablaze across British Columbia and Alberta, including a huge fire that this week devastated the picturesque tourist town of Jasper in the Canadian Rockies.

Dozens of communities, including popular holiday spots in British Columbia's Kootenay region, are under evacuation orders and several highways are closed.

This year's surge in wildfire activity comes after Canada endured its worst-ever year for wildfires in 2023, when more than 15 million hectares (37 million acres) burned, including parts of the city of West Kelowna in the heart of British Columbia's wine region.

Ellen Walker-Matthews, head of the Thompson Okanagan Tourism Association, said the industry was seeing a lot more last-minute travel decisions instead of booking in advance.

"It's a huge blow. July and August are traditionally the busiest months in the region," said Walker-Matthews, adding that while her region has been relatively unscathed by wildfires this summer, some visitors are choosing to avoid interior British Columbia altogether.

The members of the British Columbia Lodging and Campgrounds Association are reporting a 5-15% drop in bookings from a year ago, with the biggest declines coming from the hotter Okanagan and Cariboo regions, said Joss Penny, who heads the association.

"The concern is that this is something we have to live with and we have it every year now," said Penny.

Although wildfires in Canada's forests are natural and common, scientists say drier, hotter conditions fueled by climate change are leading to more volatile and frequent blazes.

'SMOKEY SKIES'

Some events, like the Salmon Arm Roots and Blues Festival, usually held in August, have now been rescheduled to earlier in the summer to avoid what is now seen as peak smoke season. The festival, which was cancelled last year due to nearby wildfires, was this year moved to July to benefit from "less smokey skies."

Wildfires and extreme climatic events are prompting tourists to "change their plans not just temporarily, but permanently," said Elizabeth Halpenny, a tourism researcher and professor at the University of Alberta, noting that seasonal workers in the sector are often the hardest hit as they have few protections during a bad season or amid a cataclysmic fire.

Tourism contributed C$7.2 billion to the British Columbia economy in 2022, and C$9.9 billion to Alberta in 2023, according to the latest government data.

Jasper National Park is one of Canada's premier tourist destinations, with more than 2 million visitors a year flocking to see its pristine mountain landscapes and abundant wildlife, including grizzly bears, moose and elk.

Kelly Torrens, vice-president of product at international tour company Kensington Tours, described western Canada as a bucket-list destination. But the company now has 49 trips that were supposed to pass through Jasper this season in limbo. Six others were forced to evacuate the park when the fire hit.

Parks Canada has cancelled all camping reservations within Jasper National Park until Aug. 6 and with potentially 50% of the town's structures destroyed by fire, the cleanup and rebuild could take years.

Halpenny is among those hedging their bets.

"I've booked a campsite stay in the mountain parks but at the same time, I booked a campsite out on the prairie somewhere and that's my backup plan because I don't want to miss out on my vacation with my family."