Heritage is a collection of customs and societal practices passed down from one generation to another, it shapes the identity of the country and the citizen by displaying all the stages of development that the country, society, and the individual himself have gone through. In this article, we will explain the importance of historic real estate and how it is valued. 

About Saudi Heritage 

The Kingdom is keen in its Vision 2030 to pay attention to heritage and its development, so there is great interest in all historical sites and the exploitation of heritage to support the economy and provide job opportunities for youth, heritage is classified into two types: 

• Cultural heritage: 

It includes archaeological monuments, buildings, and sites such as Historic Jeddah 

• Natural heritage: 

Such as natural sites, forests, geological and physiographic formations, such as the Al-Ahsa Oasis

In seven years, the Saudi Tourism Authority has managed to register five Saudi heritage sites on the UNESCO World Heritage List: 

• Madain Saleh: 

It is the first site of the Kingdom to be registered in the World Heritage List in 1429 AH – 2008 AD. It is a site of the Nabataean civilization south of Petra in Jordan and includes 111 huge tombs, 94 of which have decorated faces dating from the first century BC to the first century AD, and the site is an example of the Nabataeans’ architectural achievement and hydrological expertise. 

• Al-Turaif district in Diriyah: 

The site was inscribed on the World Heritage List in 1431 AH – 2010 AD, and is located northwest of Riyadh. The importance of the site is due to being the first capital of the House of Saud, founded in the 15th century and characterized by the Najdi architectural style that is unique to the center of the Arabian Peninsula 

• Historic Jeddah: 

Located on the eastern shore of the Red Sea since the seventh century AD, Jeddah has been a major port for Indian Ocean trade routes and is considered the gateway for Muslim pilgrims to enter Mecca. Jeddah is characterized by multiculturalism and distinctive architectural buildings and was inscribed on the World Heritage List in 1435 AH – 2014 AD. 

• Rock Art in the Hail Region of Saudi Arabia: 

The site is the largest open museum of rock carvings in the Arabian Peninsula, with an area of more than 50 kilometers, and dates back to the modern era. The site contains rock art characterized by human and animal sculptures and some other features and was included in the World Heritage List in 1436 AH – 2015 AD. 

• Al-Ahsa Oasis: 

It is a natural heritage site located in the eastern part of the Arabian Peninsula and includes some gardens, irrigation canals, springs, wells, and several historical buildings. Al-Ahsa Oasis is considered one of the most important Saudi heritage sites because it is a witness to the settlement of man in the Gulf region since the Neolithic period, and it is considered the largest palm oasis in the world with more than five million trees, listed on the World Heritage List in 1439 AH – 2018 AD. 

Historical properties are characterized by their ability to withstand long time unlike modern buildings if suitable care is provided to them and due to their economic importance, the Kingdom seeks in its Vision 2030 to preserve and develop the Saudi heritage. 

Historic Real Estate Valuation Factors 

The valuation of historic real estate is different from any other one, so several factors affect the valuation methods: 

• Physical factors: 

historic real estate requires a lot of attention as it reflect the Saudi heritage and needs many physical factors such as the cost of restoration, the rate of depreciation, and the cost of maintenance work 

• Social factors: 

These factors include the historical age of the property, its location, its architectural style, and its cultural and historical significance that makes it unique from any other property, which influences the valuation methods. 

• Legal factors:

 These include laws protecting heritage buildings and penalties for vandalism in UNESCO-registered areas. 

• Planning factors: 

Such as loss of development rights and high maintenance costs 

Other factors related to the property market include the stagnation of property values and the rate of demand for historic real estate in the property market.

What are the valuation methods for historic real estate? 

historic real estate has its characteristics and this presents a challenge for the valuer as the usual valuation methods differ, which makes him make some adjustments to suit the nature of the property: 

• Market method: 

It is difficult to apply the comparison method due to the scarcity of similar properties, but this depends on the data available for the property, when evaluating by the comparison method, there must be a similar property similar in location, size, shape, architectural style, historical and cultural connotations 

• Income method: 

historic real estate is often open to visitors to see its unique beauty and this makes the use of the building for a commercial purpose to be converted as a museum or a hall for special events taking into account the need for regular maintenance and care of the building, but the market value of the property may decrease when the investor calculates the maintenance and repair costs and does not plan the building and utilization of the space 

• Cost method:

 It is difficult to estimate the costs of historic real estate, but the cost of restoring the property can be calculated and the cost of purchasing the site can be deduced by comparing it to another site with similarities in the same factors 

In conclusion, historic real estate represents cultural and historical treasures as it reflects the national identity and contributes to enriching tourism. However, the evaluation of historic real estate faces great challenges that require joint efforts to develop evaluation tools and methods to achieve the Kingdom’s Vision 2030.