The rankings company stated the dominion’s REIT sector stays small in contrast with regional friends, with 19 listed trusts valued at about US$4 billion as of August, however that new guidelines and property sector reforms may speed up its development.
“The brand new regulation allowing REITs listed on Nomu to put money into property growth initiatives represents a serious milestone within the evolution of the Saudi REIT market,” S&P stated in its report Saudi REITs: A Market within the Making. “We anticipate it’ll encourage extra listings and assist the sector acquire scale.”
New guidelines reshape Saudi REIT market
Saudi Arabia’s Capital Market Authority up to date its REIT framework in July as a part of efforts to deepen capital markets and align with Imaginative and prescient 2030. The adjustments permit Nomu-listed REITs to put money into growth initiatives, strengthen disclosure necessities, and tighten oversight of fund managers.
The regulator stated the reforms goal to draw extra capital, increase transparency, and provides builders new fundraising choices. S&P added that the updates, along with wider financial diversification plans, ought to assist modernise the asset-management sector and improve the actual property business’s contribution to GDP.
The rule adjustments coincide with a brand new overseas possession legislation taking impact in January 2026, which is able to allow non-GCC nationals to purchase property instantly throughout most areas for the primary time. S&P stated the measure would deepen market liquidity and appeal to extra worldwide buyers.
“The brand new legislation will permit foreigners to personal property instantly throughout most areas, which may increase demand and liquidity out there,” the report stated.
S&P highlighted the continued position of Imaginative and prescient 2030 giga-projects comparable to NEOM, Qiddiya, Diriyah and The Pink Sea as key drivers of long-term demand. “We anticipate these initiatives to maintain sturdy demand for each residential and industrial property,” it stated.
Quick-term pressures might come up from a five-year lease freeze launched in Riyadh earlier this yr in September. The measure, enforced by the Basic Actual Property Authority, prohibits any lease will increase on residential and industrial properties inside the metropolis’s city boundary. It applies to each new and renewed leases and requires all rental contracts to be registered on the federal government’s Ejar platform.
The freeze, designed to stabilise prices and improve Riyadh’s attraction as a worldwide enterprise hub, may cap earnings development for landlords and buyers, S&P stated. “Rental yields are anticipated to stabilise or soften within the close to time period as landlords modify to the freeze,” the company famous.
Regardless of near-term challenges, S&P stated the outlook for Saudi REITs is enhancing as regulation matures and investor participation grows.
“The continued growth of latest merchandise, comparable to growth REITs, may remodel the Saudi market over the subsequent few years,” it stated.
