GCC REIT MARKET SIZE & SHARE ANALYSIS - GROWTH TRENDS AND FORECAST (2025 - 2030)

GCC REIT Market Trends and Insights

Rising Appetite of GCC Sovereign Wealth Funds

Gulf sovereign wealth funds are strategically reallocating capital toward domestic real estate income streams as oil revenue diversification accelerates beyond traditional international equity and fixed-income investments. Saudi Arabia's Public Investment Fund increased dealmaking to USD 31.6 billion in 2023, representing a 58% increase from the prior year, while targeting USD 2 trillion in assets under management by 2030^{[1]Ben Bartenstein and Sam Dagher, “Red Sea Tensions; Saudi Wealth Fund Outspends Peers; Dubai Real Estate Slowdown?” Bloomberg, bloomberg.com}. This shift reflects a sophisticated understanding that domestic REITs provide inflation-hedged income generation while supporting national economic diversification objectives. The trend gains momentum as traditional international allocations face geopolitical constraints and currency volatility, making domestic real estate a strategic anchor asset class. GCC sovereign funds collectively manage approximately USD 4.9 trillion, projected to exceed USD 5 trillion in 2025, creating substantial capital pools for REIT market expansion

Mandatory Shariah-Compliant Asset Screening Boosting Investor Confidence

Shariah-compliant asset screening has emerged as a fundamental market expansion driver, with global Islamic finance assets reaching USD 5.4 trillion in 2024 and projected to grow to USD 9.75 trillion by 2029, with the GCC region controlling approximately 50% of these assets. This screening process eliminates assets with prohibited activities such as conventional banking, alcohol, or gambling, creating a purified investment universe that attracts both religious and ESG-conscious investors. The dual appeal significantly expands the addressable investor base beyond traditional Islamic finance participants to include sustainability-focused institutional investors seeking ethical real estate exposure. GCC exchanges have implemented unified ESG metrics since January 2023, with Saudi Arabia publishing comprehensive ESG disclosure guidelines in November 2021, creating standardized frameworks that facilitate Shariah-compliant investment decisions. The UAE's sustainable finance framework has supported USD 35 billion in green bonds by the first half of 2024, demonstrating the intersection between Islamic finance principles and environmental sustainability that drives institutional capital allocation toward compliant REITs.

Launch of REIT-Focused Indices

Foreign ownership liberalization represents a structural catalyst for international capital inflows, with Saudi Arabia eliminating ownership restrictions effective January 2026 and the UAE implementing comprehensive REIT frameworks in April 2024. These regulatory changes address historical barriers that limited international institutional participation, particularly from pension funds and insurance companies, requiring unrestricted ownership for fiduciary compliance. The timing coincides with global institutional investors seeking yield-generating alternatives to low-yielding developed market bonds, creating favorable demand dynamics for GCC REITs offering superior dividend yields. International Financial Reporting Standards harmonization across GCC exchanges reduces due diligence complexity for foreign investors, while dual listing capabilities in the Dubai International Financial Centre and Abu Dhabi Global Market provide familiar regulatory environments for international participants. The regulatory influence extends to compliance frameworks that align with International Organization of Securities Commissions standards, facilitating cross-border investment flows and reducing regulatory arbitrage concerns.

Launch of REIT-Focused Indices

Exchange-traded fund development through dedicated REIT indices creates systematic passive investment channels that reduce individual security selection complexity for institutional investors. Tadawul and Dubai Financial Market launched specialized REIT indices in 2024, enabling index fund creation and passive investment strategies that historically drove significant capital flows in developed REIT markets. This infrastructure development coincides with the global shift toward passive investing, where index-linked strategies control approximately 40% of U.S. equity assets and are expanding rapidly in emerging markets. The indices provide transparent benchmarking mechanisms that facilitate performance evaluation and risk management for institutional allocators, addressing previous concerns about benchmark-relative performance measurement in nascent REIT markets. Regulatory influence from exchange operators ensures index methodology transparency and constituent eligibility standards that maintain investor confidence while supporting market development objectives.

Thin Free-Float and Low Liquidity

Limited free-float ratios and constrained daily trading volumes create structural liquidity challenges that deter large institutional investors requiring predictable exit capabilities for portfolio management. Most GCC REITs maintain free-float ratios below 30%, compared to 60-80% typical in developed markets, reflecting concentrated ownership structures and limited public distribution strategies. Daily trading volumes frequently fall below USD 1 million for smaller REITs, creating market impact concerns for institutional investors seeking to deploy significant capital without adverse price effects. This liquidity constraint becomes self-reinforcing as institutional investors avoid illiquid securities, further reducing trading activity and market depth. Academic research on Saudi market liquidity demonstrates strong commonality effects during boom-bust cycles, where liquidity constraints amplify during market stress periods when investors most require exit flexibility^{[2]Kais Tissaoui, Mondher Kouki, and Mounir Jouadi, “Liquidity Commonality under Normal and Boom/Bust}.

Rising Benchmark Rates Widening Valuation Yield Gaps

Monetary tightening cycles have compressed REIT valuations relative to risk-free alternatives, with regional benchmark rates tracking global tightening cycles that reduce the relative attractiveness of dividend-yielding securities. The yield gap between REIT dividend yields and government bond yields has narrowed significantly as central bank policy rates increased, creating headwinds for yield-seeking investors who can achieve similar returns through less risky fixed-income alternatives. This dynamic particularly affects retail investors who historically favored REITs for income generation but now face competitive yields from bank deposits and government securities with lower volatility profiles. Rising financing costs directly impact REIT operational performance through higher debt service expenses, with the average REIT cost of debt increasing approximately 180 basis points post-2024 rate hikes, compressing funds from operations margins. The correlation between GCC interest rates and global monetary policy creates sustained pressure as long as developed market central banks maintain restrictive policies, limiting the timeline for yield gap normalization.

Segment Analysis

By Sector of Exposure: Retail Dominance Faces Digital-Infrastructure Challenge

In 2024, the retail segment made up 36.3% of the GCC REIT market share. Malls have adapted to the rise of e-commerce by focusing on experiential formats that attract and retain visitors. Diversified vehicles, which combine retail, office, and hospitality assets, create operational advantages that help maintain stable cash flows. Industrial holdings accounted for 7.5% of the market, benefiting from the growth of regional trade corridors and last-mile delivery services. Residential assets held a smaller share of 5%, primarily due to ownership restrictions in certain jurisdictions. Data-center assets, while currently holding a minor share, are expected to grow significantly with a 12.6% CAGR forecast through 2030. This growth is driven by increasing demand for hyperscale cloud services and investments in regional fiber-optic connectivity projects.

Healthcare assets are expanding at a rate of 11.4%, supported by aging populations and the introduction of universal-care mandates. Industrial stock is projected to grow by 9.8% annually, reflecting changes in supply chains and the expansion of free trade zones. These emerging sectors, including healthcare, industrial, and data-center assets, are helping to diversify revenue streams and enhance the overall stability of the GCC REIT market. By tapping into these growing niches, the market is better positioned to adapt to changing economic and industry trends.

Note: Segment shares of all individual segments available upon report purchase

By Market Capitalization: Large-Cap Stability Versus Small-Cap Innovation

In 2024, large-cap firms, each valued at over USD 10 billion, held a dominant 47.4% share of the GCC REIT market. These firms benefit from preferential investments by pension and sovereign funds due to their ability to offer scale, reliable reporting, and consistent dividend payouts. Large-cap firms are projected to grow at an annual rate of 8.7%, driven by their strategy of acquiring high-value assets while divesting non-core holdings to maintain the quality of their portfolios. This approach ensures their continued leadership in the market. Mid-cap firms, valued between USD 2 billion and USD 10 billion, represented 34% of the market. 

These firms focus on acquiring businesses within specific sectors to enhance their operational expertise. To fund these acquisitions, mid-caps rely on syndicated loans and sukuk markets, which support their forecasted growth rate of 9.6%. Small-cap firms, valued at under USD 2 billion, accounted for 20% of the market but are expected to grow the fastest, with a forecasted CAGR of 11.3%. These smaller firms overcome their size limitations by using innovative methods such as tokenized fundraising and niche mandates. Digitized issuance further reduces costs, enabling small-cap firms to raise capital efficiently without losing control. Together, the large-cap, mid-cap, and small-cap firms create a balanced maturity curve that strengthens the GCC REIT market. This diversity in firm sizes and strategies ensures the market remains robust and adaptable to changing economic conditions.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

In 2024, Saudi Arabia solidifies its regional dominance with a commanding 57.0% market share, bolstered by its Vision 2030 infrastructure investments and an assertive strategy from the world's most active sovereign wealth fund. The UAE, with a 29.0% market share, sees its concentration in Dubai's bustling international business hub and Abu Dhabi's government-endorsed development projects. Qatar, holding an 8.0% market share, leans heavily on Ezdan REIT's diverse portfolio, while Kuwait, Bahrain, and Oman pool their resources for the remaining 6.0% through targeted local market ventures.

Oman stands out as the fastest-growing market, boasting a robust 10.80% CAGR through 2030. This surge is fueled by the Vision 2040 economic diversification push and a burgeoning tourism infrastructure, paving the way for novel REIT investment asset classes. The UAE isn't far behind, with a commendable 9.10% growth, riding the wave of international business expansion and its allure for foreign capital through cross-border listings. Saudi Arabia, while projecting a steady 8.20% CAGR, showcases its market maturity and the influence of a large base effect. Yet, it retains absolute growth leadership due to its scale advantages and a forward-thinking regulatory modernization. A historical CAGR analysis juxtaposing 2019-2024 with the 2025-2030 forecast underscores a notable acceleration in smaller markets like Oman and Qatar. Here, government-led infrastructure spending is birthing new investable assets.

In contrast, larger markets exhibit a steady, albeit moderated, growth rate, indicative of their maturation. National securities regulators play a pivotal role, ensuring that while cross-border investments are facilitated, there's a pronounced emphasis on nurturing the domestic market. It is evident in their preferential treatment for local listings and a focus on regional asset concentration.