GURUGRAM, India, Feb. 19, 2024 /PRNewswire/ — Makkah is witnessing a surge in its sellable apartment market, driven by the ever-growing influx of religious pilgrims and ambitious urban development initiatives. Ken Research’s ‘Makkah Sellable Apartment Market Outlook’ report predicts a remarkable 7.2% CAGR, propelling the market size to a staggering $53 billion by 2027. This press release sheds light on the key drivers, challenges, and exciting prospects shaping this dynamic landscape.
Market Overview: Building Homes, Nurturing Faith
Beyond providing residential options, the sellable apartment market in Makkah plays a crucial role in accommodating the millions of pilgrims visiting the holy city each year. It also contributes to the city’s economic diversification and urban transformation. In 2022, the market reached a size of $32 billion, and it’s on track for significant growth, fueled by:
- Unending Demand from Pilgrims: The ever-increasing number of Hajj and Umrah pilgrims drives the need for more accommodation options, particularly apartments offering convenience and affordability.
- Government’s Vision 2030: The ambitious urban development plans like Haramain High-Speed Railway and King Abdullah Road Expansion project improve connectivity and stimulate real estate development.
- Focus on Pilgrim Experience: Growing emphasis on enhancing the pilgrim experience encourages investment in modern and well-equipped apartment complexes.
- Diversification beyond Pilgrimage: Expanding tourism and business opportunities attract residents seeking long-term accommodation options.
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Market Segmentation: Diverse Needs, Tailored Solutions
The report delves into the various segments of the Makkah sellable apartment market, offering a comprehensive view:
- Location: The Central Zone, closest to the Grand Mosque, holds the largest share (60%), followed by the Expansion Zone (30%) and the Outskirts (10%). Proximity to holy sites influences preferences.
- Apartment Type: Studio and one-bedroom apartments dominate (50%), followed by two-bedroom (30%) and three-bedroom (20%). Apartment size caters to pilgrim group sizes and budgets.
- Price Range: The luxury segment commands a premium (30%), followed by mid-range (40%) and affordable (30%). Diverse needs and budgets drive segment choices.
Competitive Landscape: Local & Global Players Join Hands for Progress
The market features a mix of established local developers, regional leaders, and international investors:
- Local Champions: Jabal Omar Development Company, Dar Al-Arkan, and Emaar Makkah Clock Royal Tower Hotel offer local expertise and strong track records.
- Regional Leaders: DAMAC Properties (UAE) and Emaar Properties (UAE) bring regional experience and diverse project portfolios.
- Global Investors: The Abraaj Group (Middle East) and Colony Capital (US) provide international investment and development expertise.
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Challenges: Navigating the Path to a Sustainable Future
Despite the promising outlook, some challenges need to be addressed:
- Limited Land Availability: Scarcity of suitable land within the central zone poses a challenge for expanding apartment supply.
- Infrastructure Constraints: Upgrading infrastructure, particularly transportation and utilities, is crucial to support the growing population and accommodate new developments.
- Managing Seasonality: High fluctuations in occupancy rates throughout the year require developers to adopt innovative marketing and management strategies.
- Balancing Pilgrim Needs & Urban Development: Striking a balance between catering to pilgrim needs and ensuring sustainable urban development remains crucial.
Future Outlook: A Smart, Sustainable, and Inclusive Ecosystem
The Makkah sellable apartment market is poised for continued growth, driven by several exciting factors:
- Focus on Smart City Development: Adoption of smart technologies like smart grids and automation will enhance operational efficiency and sustainability.
- Expansion of Tourism & Hospitality: Diversifying tourism offerings and promoting year-round tourism will ensure sustained demand for apartments.
- Public-Private Partnerships: Collaboration between government and private developers will be key to addressing infrastructure challenges and ensuring sustainable development.
- Focus on Affordability & Inclusivity: Developing affordable housing options and ensuring accessibility for all pilgrims will be crucial for inclusive growth.
Key Takeaways for Stakeholders:
This report offers valuable insights for various stakeholders in the Makkah sellable apartment market, including:
- Developers: Focusing on innovative and sustainable apartment designs, utilizing smart technologies, and collaborating with stakeholders.
- Investors: Identifying high-growth segments like affordable housing and mixed-use developments catering to diverse needs.
- Policymakers: Implementing regulations that promote sustainable development, manage pilgrimage flows, and ensure affordability.
- Pilgrims & Residents: Choosing registered accommodation providers, respecting local regulations, and contributing to a safe and respectful environment for all.
Conclusion:
Makkah’s sellable apartment market stands on the cusp of a historic transformation, offering immense potential to accommodate pilgrims, enhance the visitor experience, and support the city’s ambitious development goals. By overcoming challenges like infrastructure constraints and seasonality, the sector can unlock its full potential and contribute to a thriving, sustainable, and inclusive future for Makkah. Through collaborative efforts, a commitment to responsible development, and a focus on pilgrim well-being, the Makkah sellable apartment market can truly ascend to new heights, reflecting the holy city’s enduring significance and serving as a beacon of hospitality and faith for generations to come.
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