Cayan Group chief: Saudi Arabia investors on the rise
Foreign investors are becoming pickier about the Middle East region and the top investments within the region are coming in from Saudi Arabia, a top industry executive said.
“International investors previously wanted to come to the region just because they wanted to [set] foot in here; they always looked at it as untouched region where there were lots of opportunities,” said Ahmad Al Hatti, president and chair of the board at Saudi Arabian property developer Cayan Group.
But this perception has recently started to shift, as foreign investors would now only come to the region “if there is an outstanding opportunity”.
“If any investor will achieve an investment opportunity with IRR [Internal Rate of Return] of 15 percent, they want 25 percent here. They will not go with the same retain, but there are still people looking at it,” Al Hatti added.
This could be regarded a natural outcome as property investors are becoming generally more cautious about the region, given its economic and geopolitical situations.
This is especially true for real estate, as all has not healed since the 2008 property crash in Dubai, coupled with the instability that followed the drop in oil prices.
All eyes on Saudi Arabia
According to Al Hatti, amid all the tension, Saudi Arabia’s property market is rising in popularity as a more secure and safe option of property investment in the region.
“We’ve been approached by some funds from Switzerland who want to enter the Saudi market,” he said, noting that, from what he sees, the majority of real estate investments are now coming from Saudi investors, who are further injecting the kingdom’s real estate market.
“If we’re talking about Saudi investors, the appetite for them is now inside Saudi Arabia, because there are lots of opportunities inside [Saudi Arabia] and there is a high yet secure potential. It is much stronger and more stable than Dubai,” Al Hatti said.
But while the appetite might be high for Saudi Arabia, diversification of investments is still a practice taken up by these Saudi investors.
“Saudi investors always want to diversify – they don’t want to put everything only in Saudi Arabia. So, they are the highest now, in my opinion. I think in the GCC countries there are ranked at the top,” he added.