New Delhi: Indian investors are preparing to invest in Saudi Arabia's booming real estate market, which they predict will surpass the UAE in the coming years.
The Kingdom is becoming an increasingly desirable location for investors, including those in real estate, thanks to significant policy and fiscal initiatives as well as ongoing megaprojects in non-oil industries under Vision 2030.
According to Manish Mohan, senior director of the Confederation of Indian Industry, there are enormous opportunities in Saudi Arabia's real estate market.
Indian investors anticipate returns from the sector that will be at least as high as those they received from investing in Dubai real estate decades ago.
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Mohan anticipated that it would occur very soon. "In the following five years, Saudi Arabia would be a different story. Investment in real estate would be wise because property values would soar, he said.
"Indians are not only seeing good returns, but also a good opportunity, and it's a profitable business for them."
Strata, a fractional investment fund in high-end real estate assets, is one of the Indian pioneers interested in Saudi real estate and has plans to invest $500 million over the next five years.
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After a recent trip to Saudi Arabia, Sudarshan Lodha, the company's chief executive officer, told Arab News that "everyone has only one thing to say — if you want to put money, you need to put money in Saudi Arabia."
We went on a trip and realised there were chances for an exponential return," he said.
"Maybe the initial years might be a smaller deployment of about $20 million to $50 million... a five-year plan would be close to half-a-billion dollars."
In the beginning, Lodha intended to concentrate on offices and warehousing, with returns of at least 12 to 18 percent.
"Anything lower than that is not attractive to us, so if any of the markets today are going to offer us less than that percentage, then we will not be there," the speaker continued.
Lodha pointed out that Saudi Arabia might grow to be a market larger than the UAE, where the real estate market, particularly in Dubai, had already reached a stable state.
He claimed that after 20 to 30 years of continuous advancement and other developments, the growth was to be expected. Saudi Arabia, on the other hand, has a greater opportunity to surpass what Dubai has built in the last three decades given the kind of vision they currently possess.
