Riyadh- In coincidence with the residential properties sector poor performance, the commercial properties sector seems to undergo a first of its kind rise in prices, especially in the commercial stores rental fees during the past five years.
Ibrahim Mortada, manager of a commercial mall in Riyadh, said that decreased dealing in residential properties affected the prices but not those of the commercial properties, taking into consideration that censorship is absent and a one united contract that obliges everyone to adhere to specific prices is also unavailable.
In response to real-estate reforms issued by the government, majorly the law of white-lands fees, the mobility and value of Saudi real-estate sector dropped in notable levels but the influence on commercial properties performance was minimal compared to residential properties.
Investor Ahmad al-Dusari said that he had to shut down his supply markets after the rental fees doubled in three years, a rate that he can’t bear. Dusari said that he used to pay annually SAR160, 000 (USD42. 600) but the property owner doubled the rental fee to SAR320, 000 (USD85, 000). He failed short to pay off this amount and the store has been closed since one year.
Dusari called on relevant authorities to take necessary procedures to correct the condition in the commercial properties sector because this will affect the citizen in the first place.
Broker Hani Habtour said that leasing stores in Saudi Arabia is among the sectors undergoing a rise in prices. He added that demand-supply balance is a major driver of this sector especially when it comes to stores located in crowded areas.
“Some properties’ owners raise the rental fees on annual basis and tenants accept this because they are already gaining huge profits,” continued Habtour.
Saudi: Commercial Sector Prices on the Rise
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