CBRE - Middle East Real Estate 2023 Outlook

CBRE anticipates a positive outlook for the real estate sectors across the Middle East in 2023, as elevated oil prices and resolute economic growth are expected to support strong levels of occupier and investment activity, according to the company’s 2023 Middle East Real Estate Market Outlook.

Key Takeaways

1. Macroeconomic

   The economies of GCC countries are expected to continue to record strong rates of growth in 2023. Both the hydrocarbon and non-hydrocarbon sectors are expected to continue to provide material contributions to headline growth rates. The average GDP growth across GCC countries in 2023 is set to reach 2.7%.



2. Real Estate Projects

   Total value of real estate projects planned or underway in the GCC currently stands at $1.36 trillion. Saudi Arabia accounted for 64.5% of this total, equating to around $877 billion worth of projects. This is followed by the UAE, where its $293 billion worth of projects account for 21.6% of the total.



3. Offices

   Strong levels of economic growth are continuing to attract occupiers to the region with both Saudi Arabia and the UAE being key beneficiaries. With supply being constrained in these two markets, we expect rental rates to continue to grow. In other markets, a combination of subdued demand and excess supply will mean rental growth is likely to remain anemic.



4. Residential

   Residential markets in the region will likely see somewhat fragmented performance in 2023, supply gluts in certain markets will drive down performance, whereas lack of supply in key business hubs such as Dubai and Riyadh is likely to mean these markets outperform.



5. Hotels

   We expect that this will be the first full year which does not have pandemic related restrictions and as a result, in most parts, we forecast that KPIs will continue to improve and will by year-end almost uniformly surpass 2019 levels.