The news of Saudi Arabia hosting the 2027 Asian Cup is an exciting prospect. It will bring strong benefits to the Kingdom's real estate and construction industries.
The timing of the event is ideal with the Kingdom increasing investments in creating a strong entertainment sector. This is a key aspect of Saudi Arabia’s Vision 2030 plan to diversify the Kingdom’s economy.
Saudi Arabia's goal is to boost household spending in the sector from 2.9% to 6% by 2030. The upcoming Asian Football Confederation (AFC) tournament will play a strong role in achieving this target.
PLANS FOR THE 2027 ASIAN CUP IN SAUDI ARABIA
Saudi Arabia announced plans to renovate stadiums and construct three new facilities for the tournament. The capital city of Riyadh is set for major investments. In its bid book, Saudi Arabia intends to renovate the King Fahd International Stadium in Riyadh by 2025. The stadium's capacity will increase to 80,015 spectators.
The Kingdom also plans to renovate the Prince Faisal bin Fahd Stadium in Riyadh, increasing its capacity to 44,500 spectators. This renovation project not only involves removing the running track. But it also involves lowering the pitch, replacing two stands, and adding a new tier.
In the capital city, there are two new stadiums planned. The first, the 22,000-seat Riyadh Stadium will stand 700 meters from a metro station. The second stadium is the Qiddiya Sports Stadium. This stadium will have a capacity of 22,000 seats and is being built by the Qiddiya Investment Company. This stadium will open in 2023.
Also, there is a 40,000-seat stadium planned for Damman. Jeddah will then have two stadiums in the tournament. This is the 59,000-seat King Abdullah Sports City Stadium. Then the 27,000-seat Prince Abdullah al-Faisal Stadium. The latter is being renovated to meet the standards of the AFC Asian Cup tournament.
IMPACT OF THE ASIAN CUP ON SAUDI REAL ESTATE
The overall real estate market in Riyadh is already strong. Extensive government initiatives, rising investment, and a growing population are key factors here. Hosting the AFC Asian Cup will enhance this further not just in Riyash, but throughout the Kingdom.
The AFC Asian Cup will have a double effect on Saudi Arabia's real estate and construction market. In the long term, increased foot traffic from the event should boost the already strong retail and hospitality property markets. According to JLL, average annual rents for super-regional malls in Riyadh increased by 5% in Q3 2022 and stayed stable for regional malls. Meanwhile, rents for super-regional and regional malls in Jeddah rose by 3% and 2%, respectively.
OVERALL IMPLICATIONS
The 2027 Asian Cup in Saudi Arabia will offer attractive real estate opportunities. But it also brings long-term socioeconomic benefits too. So, hosting the tournament is a positive move for the country. Yet it also has wider benefits for the Middle East's effort to diversify their economies.
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