Saudi Arabia’s Real Estate Investment Trust (REIT) sector is poised for faster growth as more of the Kingdom’s large-scale construction projects mature into income-generating assets, Sapna Jagtiani, Director & Lead Analyst for the Middle East at S&P Global Ratings, told Zawya Projects.
She noted that this could include select assets from the country’s major giga-projects. However, Jagtiani cautioned that lengthy development timelines mean most of these assets will begin contributing significantly only once they are leased and operational—likely around 2030 or later.
While Saudi Arabia saw a flurry of REIT launches in the early years, new listings have slowed over the past five years. The Tadawul exchange currently hosts 19 listed REITs.
S&P’s report, Saudi REITs: A Market in the Making, co-authored by Jagtiani, describes the sector as still relatively small, with a market cap of about $4 billion as of 30 August 2025 and an asset base exceeding $7.5 billion at the end of 2024. Most operators remain modest in scale, with a median balance sheet size of around $368 million. By comparison, the US—the world’s largest REIT market—had roughly $1.2 trillion in REIT market capitalisation by end-2024, with Japan, the UK, Australia, Canada, France, and Spain also among the more established markets.
Jagtiani said Saudi Arabia’s regulatory framework is broadly aligned with global standards. She added that while it will take time for companies to mature under this framework, a steady supply of strong, income-producing assets is essential for sector expansion.
Recent regulatory updates by the Capital Market Authority (CMA) have allowed REITs on the Nomu-Parallel Market to invest in real estate development projects under certain conditions. Current rules require Saudi REITs to allocate at least 75% of their portfolios to income-generating assets. Qualifying investment funds are exempt from corporate tax, and profitable REITs must distribute at least 90% of their net earnings to unitholders.
Jagtiani also highlighted abundant opportunities for developers, particularly in the residential and commercial segments. Knight Frank projects a 26% growth in housing supply by 2030. S&P reported that the National Housing Company aims to deliver 600,000 units by 2030, half of which are expected by end-2025.
Riyadh’s commercial real estate supply is forecast to grow by 70–80% by 2027, driven by the regional headquarters (RHQ) initiative and limited availability of Grade A office space. Despite the diversification benefits of acquiring overseas assets, roughly 90% of Saudi REIT holdings remain domestic.
Long-term prospects for the Kingdom’s property market are robust, supported by significant government spending—particularly through the Public Investment Fund (PIF)—as part of broader economic diversification efforts. Still, the sector faces risks, including construction execution challenges, inflationary pressures, interest rate conditions, regulatory shifts, and capital structure constraints.
According to S&P Global Ratings credit analyst and co-author Timucin Engin, REITs can attract long-term domestic and foreign capital, enhance diversification, and provide investors with steady income streams—making the development of this asset class a key priority for Saudi authorities.
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