In cities like Riyadh, Jeddah, Dammam/Al Khobar, Dubai, Abu Dhabi, Cairo, Muscat, Doha, Manama and Amman, ongoing urban development is placing a strong emphasis on improving the quality of life for residents. This focus aligns with regional initiatives such as Saudi Vision 2030. In parallel, mixed-use projects are integrating social infrastructure, transforming them from mere "developments" into vibrant "destinations," enriching the overall living experience in these dynamic urban centers.
Colliers' report, titled 'Monetising Quality-of-Life Initiatives and Introducing Social Infrastructure for Urban Growth,' explores the potential price premiums that can be achieved by introducing enhancements related to the quality of life and social infrastructure in urban development projects.
The research findings have revealed a range of price premiums associated with well-planned mixed-use developments that prioritise Quality of Life and Social Infrastructure, spanning from 15% to 45% across the region. Notably, these percentages see substantial increases when considering additional factors such as the developer's reputation, accessibility to essential amenities like retail, education, health and a growing emphasis on walkability.
The premium associated with a residential unit boasting features like a water view, golf view, or convenient proximity to social infrastructure can exhibit substantial variations. These differences hinge on a multitude of factors, including location, the quality of the view, proximity distance, local real estate market conditions, and the overall desirability of the area.
Colliers' analysis underscores that a property's premium is not solely determined by its location and build quality; it is equally influenced by the presence of on-site social and mixed-use elements. The harmonious integration of various land uses, supported by community endorsement, exerts a positive influence on property prices. Neighbourhoods that embrace diversity and offer a rich tapestry of amenities, including retail, dining, educational facilities, parks, and communal spaces, are highly sought after. However, the optimal density of these elements depends on occupier demand and local catchment dynamics.
These social elements are the vital 'glue' that binds a development together, with their pricing contributing to the added hedonic value and price premiums of a mixed-use development. Today, residential investments are not solely about property but about creating vibrant communities that enrich people's lives and enhance the overall quality of living.
Colliers is a leading diversified professional services and investment management company. With operations in 66 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 28 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.5 billion and $98 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors, and our people.