Lerch Bates Inc. Building Insight

Global Leaders in Technical Consulting for the Building Industry

Saudi Arabia-The Next Jewel of the Middle East?

I just returned from a three day real estate show in Jeddah, Saudi Arabia. What struck me was the level of market activity. We have all seen the activity in UAE over the last decade and it appears the activity has now switched to the Kingdom of Saudi Arabia. Currently there is US$283.8B of projects in the Saudi pipeline. This represents a 21% regional market share. In 2010, another US$144B is expected to be added. Foreign direct investment is expected to grow by 20% in 2010. In the last four years, the Kingdom of Saudi Arabia has risen from 67th to 13th position in the World Banks ‘Ease of Doing Business’ index and currently holds the #1 position in the Middle East. The commercial and hospitality sectors expect the largest growth, especially in Jeddah and Makkah.

Will the Kingdom of Saudi Arabia learn anything from the UAE? We all watched as the UAE overbuilt and then melted down. Let’s hope there were lessons learned. Only time will tell.

I would be interested in hearing observations from other professionals within the industry.

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