Savills: Positive Outlook for MENA Real Estate in 2025
This growth is fuelled by robust economic development, infrastructure expansion, and rising demand across various sectors.
Nearly 75% of Savills researchers worldwide anticipate a significant improvement in real estate investment activity by 2025, accompanied by a robust recovery in capital values. The Middle East and North Africa (MENA) region, encompassing pivotal markets like the UAE, Saudi Arabia, and Egypt, is well-positioned to harness these positive trends. This growth is being driven by extensive infrastructure projects, forward-looking economic strategies, and rising demand across multiple sectors.
Projected Growth in Investment Turnover
Savills forecasts a 27% rise in global real estate investment turnover, reaching $952 billion in 2025 and exceeding $1 trillion by 2026. Insights from the firm’s 33 heads of research reveal heightened optimism across all asset classes, particularly in the MENA region. This optimism is fuelled by ambitious urban development initiatives and government policies designed to attract foreign direct investment.
Paul Tostevin, Head of Savills World Research, comments: " After a chastening few years, the tide is turning. The cyclical factors weighing on property values and investment activity are beginning to recede, and the nascent recovery in real estate capital markets should gather momentum in 2025."
Richard Paul, Head of Professional Services & Consultancy, Middle East, Savills adds, "The MENA region continues to demonstrate exceptional resilience and adaptability in the face of global economic shifts. By leveraging its strategic geographic position, ambitious infrastructure projects, and forward-thinking policies, the region is poised to become a top destination for real estate investment in 2025 and beyond. Investors are particularly drawn to the region’s emphasis on sustainability and innovation, which are increasingly critical factors in driving long-term growth."
MENA’s Prime Office Market as a Growth Catalyst
The prime office market in the MENA region is emerging as a major growth driver. Cities like Dubai and Riyadh are expected to see increased leasing activity and rental growth. The UAE’s strategic position as a global trade and tourism hub continues to attract international businesses and investors. Meanwhile, Saudi Arabia’s Vision 2030 initiatives, featuring transformative projects, are spurring demand for Grade-A offices and luxury residential properties, solidifying the Kingdom’s status as a prime investment destination.
Global Optimism for Prime Office Spaces
Globally, Savills researchers are particularly bullish about prime office spaces, with 81% forecasting rental growth and 91% predicting higher leasing activity. Among the top markets for rental growth in 2025 are Saudi Arabia, the UAE, India, the UK, and Spain, reflecting the global appetite for high-quality office developments.
Renewed Interest in Secondary Offices
Secondary office spaces are also garnering attention as repricing in these assets nears completion. Savills anticipates that value-add and opportunistic investors will begin targeting secondary offices. While challenges persist, modest increases in rents and leasing activity are expected in regions such as the Middle East, India, Japan, South Korea, Denmark, and Switzerland.
Boom in Industrial and Logistics Sectors
The industrial and logistics sector is poised for substantial growth, supported by the MENA region’s booming e-commerce market and strategic role in global trade. Modern logistics facilities in cities like Dubai and Jeddah stand to benefit significantly. Additionally, Egypt’s urban expansion strategy, including the New Administrative Capital, is driving growth in residential and entertainment-focused retail sectors, enhancing its attractiveness to international investors.
Retail Sector on the Rise
The retail sector in MENA is expected to improve as consumer confidence strengthens and retail sales volumes grow. Mixed-use developments and high-quality shopping destinations are reshaping the retail landscape, aligning with evolving consumer preferences and elevating the shopping experience.
Focus on Sustainability and ESG Initiatives
Sustainability is becoming a cornerstone of real estate investment strategies in the MENA region. Savills researchers highlight the increasing importance of Environmental, Social, and Governance (ESG) considerations in shaping investor decisions. The region has made notable progress in adopting green building practices, renewable energy projects, and sustainable urban planning, aligning with global trends and meeting the rising demand for eco-conscious investments.
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