Saudi: 700,000 administrative offices needed by 2019

(MENAFN- Arab News) The Kingdom will need an estimated 700,000 administrative offices over the next five years, 85 percent of them in major cities such as Riyadh, Jeddah, Makkah, Madinah and Dammam. The need for administrative offices is on the increase in light of plans for rapid economic growth in the coming years



According to statistics, the number of registered subscribers at the Jeddah Chamber of Commerce and Industry (JCCI) has grown from 47,000 to 75,000 over the past three years



These figures indicate that the city will need more office space for the large number of businesses and other establishments that will be launched in the city



Real estate investors are showing greater interest in office buildings, as profit margins for renting out such facilities are greater than for residential flats. Awad Al-Zahrani, deputy chairman and member of the Real Estate Appraisal Committee at the JCCI, said that demand for administrative offices in the country would grow at a rate of 15 percent to 20 percent



Factors that contribute to greater demand for administrative offices include the Kingdom's annual population growth rate, pegged at more than four percent. Around 70 percent of the Saudi population is under the age of 30, Al-Zahrani said



The Jeddah Municipality has stipulated that business activities not be practiced in residential or mixed-purpose buildings



Al-Zahrani, however, appealed to municipal authorities to relax this condition, at least for small and micro establishments, which mostly operate from buildings meant for residential use since they cannot meet the costs of operating from a commercial complex



He said that annual rents on Jeddah's major streets, including King's Road, Tahlia Street, or Madinah Road, range between SR500 to SR1,500 per square meter