SICO BSC (c), a leading regional asset manager, broker, and investment bank with a direct presence in Bahrain, Saudi Arabia, and the UAE, published its fourth annual investor return assessment survey, offering an inside look into the economic and return requirements of investors across the GCC.
This year’s survey, conducted in September, gathered insights from a diverse group of 209 respondents across the GCC investment ecosystem, including C-suite executives, fund managers, business owners, and institutional investors. Respondents provided feedback on their expected returns across asset classes, including listed equities, government bonds, real estate, private equity, and cash deposits, while also sharing their economic outlook and views on which asset class offers the best risk-adjusted returns over the next 12 months.
SICO’s Group CEO, Najla Al-Shirawi, commented on the report publication, saying, “As we navigate an era of high interest rates, global inflationary pressures, and geopolitical uncertainty, the region remains resilient, with Saudi Arabia and the UAE leading the charge in economic transformation. This report reflects the collective insights of the GCC’s investment community and serves as a roadmap for identifying opportunities and aligning solutions with ever-changing market needs. As we move into 2025, these findings will be an essential resource for addressing market challenges, and we remain committed to supporting our clients with insights and solutions that align with their goals.”
Despite navigating a challenging global environment, investor sentiment remains robust, and market participants are optimistic about Saudi Arabia, the UAE, and Qatar, with 83%, 79%, and 52% of respondents, respectively, expressing positive sentiment. The outlook for Kuwait and Bahrain is largely neutral, while Oman has seen an increase in optimism this year.
Based on respondent expectations, the return requirements for listed equities, the most preferred asset class in terms of risk adjusted returns over the next 12 months, remained consistent at 9-12% for 2025 across the GCC, mirroring last year’s range.
Within income-generating real estate, required returns across the GCC were stable at 7-10%, despite challenges such as market volatility and tenant risks, economic growth driven by increased government spending and infrastructure development in markets like the UAE and Saudi Arabia is increasing demand. With rising tourism, population growth, and a significant trajectory of private and public sector projects, the outlook for real estate remains positive.
Private equity retained its position as the asset class requiring the highest returns, exceeding 16% in Saudi Arabia and Oman, between 13-15% in the UAE, Kuwait, and Bahrain, and 10-12% in Qatar. In terms of 10-year USD government bonds, required returns ranged from 5% in Saudi Arabia, the UAE, Qatar, and Kuwait to 6% in Bahrain and Oman, consistent with investor expectations for relatively lower-risk fixed-income instruments.
Cash deposit return requirements for Saudi Arabia, the UAE, Oman and Bahrain were similar to last year at 5–6%. Meanwhile, Qatar saw slightly lower return requirements this year at 3–4%, compared to the previous year’s range of 5-6%. Respondents required a wider range of returns in Kuwait at 3–6%, compared with the 5-6% requirement last year. These results indicate relative stability in cash deposit returns across most GCC markets, with slight adjustments reflecting liquidity conditions and regional dynamics.
In terms of issues impacting the investment landscape, the report highlights that while geopolitical tensions were the top concern for investors, the GCC economies have demonstrated resilience. Supported by diversification efforts, government spending, and the growth of non-oil sectors, the investment landscape remains stable. The report further notes that global inflation, while a concern, is projected to decline, signaling a potential easing of economic pressures.To read the Investor Return Requirements in the GCC Report 2025, please visit sicobank.com.
