JLL shares insights on opportunities within myriad sectors in Jeddah
JLL, a leading professional services firm that specializes in real estate, investment management and development consultancy services, hosted a VIP networking roundtable in Jeddah, Saudi Arabia, to discuss the opportunities within Entertainment, Industrial and Healthcare sectors that align with Vision 2030.
Key insights shared by JLL at the event included:
Defining the new ‘sweet spot’ in the Jeddah residential market: Currently, supply is either in the form of low-rise villas or a limited number of extremely high-rises high-end apartments. Smart developers are however beginning to recognize that neither of these product categories match the changing expectations of consumers. Jeddah will witness a shift to the middle ground as developers respond to the “sweet spot” in demand for mid-rise apartments in mixed use projects at more affordable prices.
Jeddah’s informal settlement areas: The urban redevelopment of Jeddah is the first in the Kingdom to make a concrete move towards redeveloping these spaces. As a result, former residential buildings, offices and retail plazas, with high vacancies in other parts of Jeddah have seen a sudden spike in demand from the displaced families, businesses and retailers. In the long run, it opens up the opportunity for improving the overall equation between the city level supply and demand. Opportunity also exists for the private sector to participate across the redevelopment project lifecycle and different aspects, such as infrastructure, real estate, among others.
Opportunities in Healthcare: As of 2020, Jeddah had a ratio of 1.75 beds per 1,000 population, which is lower than the Vision 2030 target of 2.7 per 1,000 population by 2030. The increase in population, coupled with the increase of ageing population and prevalence of non-communicable diseases, has led to a rise in the demand for healthcare services in the form of specialized hospitals and centers of excellence in key specialties such as orthopedics, cardiac sciences, neurosciences, oncology and extended care (which includes Long term care, Acute and Post Acute Rehabilitation and Home care). Further to this, there are PPP opportunities in the healthcare market whereby the private sector can assist in the health cluster’s development of healthcare facilities, particularly those facilities in line with the New Model of Care systems of care.
Location based entertainment: As of May 2021*, the global location-based entertainment (LBE) market was valued at USD $3.05 billion in 2020. Jeddah has been underserved for international grade entertainment and cultural offerings and is likely to see footfall growth through Vision 2030 from increase in international and domestic tourism, and population growth. The city is likely to witness an increase in international pull on the back of activations with global appeal e.g. the F1 Saudi Arabian Grand Prix and WWE Elimination Chamber.
Logistics in Jeddah: A key impact of the pandemic has been the considerable movement across supply chains globally which opens up significant growth opportunities for Saudi Arabia. Manufacturers and suppliers across the globe have been re-evaluating their supply chain strategies with a view to shorten the existing supply routes to avoid disruptions to their goods flow process. While companies evaluated their location decisions, we saw considerable preference being given to locations which offer access to multi-modal transportation networks. This is particularly significant in Jeddah’s context as the city offers access to an attractive industrial ecosystem comprising of multiple well developed industrial clusters with competitively priced product offering, high quality utility systems, and a well-established logistics network.
