GCC real estate investments have reached $1trillion by early 2020, media reports said. The investments are part of GCC efforts to further drive economic and social transformation, according to a report published by Strategy & Middle East – PwC.
These mega projects are anticipated to involve high risks as they involve tens of billions of dollars in investments. However, they will boost GCC’s position on the real estate front by creating more environmentally sustainable communities.
The GCC real estate market is anticipated to rebound in 2020 or only in 2021. Because of that investors who previously perceived the region’s real estate market as an asset class are now cautious despite government initiatives. Upcoming events such as Expo 2020 Dubai are expected to drive real estate demand and create significant opportunities for investors.
The real estate mega projects are being encouraged in the region to diversify the non-oil economies. But to ensure these projects are shaping up in the right direction, it is important to develop the right institutional setup, the report noted.
The report pointed out that different institutional setups can be introduced for the mega projects depending on the ecosystem in which they operate, however, selecting the right institutional set up will depend on various factors.
Charly Nakhoul, Principal at Strategy & Middle East said, “The projects are important for the region and were not planned around short- mid- term economic fluctuations. Some of these projects are planned to change the face of the economies aligned with the country’s visions; others are being pursued to respond to immediate needs.”