Housing takes up biggest share of Saudi Arabia's construction contracts - and could hit $60b
Kingdom's construction contracts zoom to $142b as more projects go for tenders
Dubai: Saudi Arabia’s residential sector accounts for the dominant share of construction contracts, with new housing a major policy priority for the government and taken up by private developers as well. Contracts for new housing should make up around $60 billion by 20228 compared to $43.5 billion in 2023.
This made up 31 per cent of the Kingdom’s overall construction output value last year. The 'planned volume' of residential units has risen to 660,000 units - a substantial 30 per cent increase in the last 12 months alone.
“We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value,” said Mohamed Nabil – Regional Partner, Head of Project & Development Services, MENA, at the consultancy.
“Given the scale of development pipeline, the government is hoping to attract over $3 trillion in investments by 2030, a figure recently confirmed the Minister of investment during the inaugural Sino-Gulf Cooperation for Industries and Investments Forum in China last month.”
Riyadh leads
By hosting more of Saudi Arabia's new generation of flagship projects, Riyadh leads the way in bagging the biggest share of the contracts. Some 38 per cent of existing contract awards are for Riyadh Province, equating to $54 billion, followed by Mecca and Tabuk provinces, at $28.7 billion and $28.5 billion, Knight Frank estimates.
Arguably one of, if not the most expansive, real estate development programs ever seen in the world is gathering pace in Saudi Arabia
Construction sector related contracts accounted for 61 per cent of the total value, followed by transportation sector at 33 per cent. This throws into focus the 'significant investment being made in bolstering the capital’s transportation infrastructure as the population swells to a projected 10 million by 2030'.
Giga projects
Saudi Arabia's roster of transformation projects - or giga-projects - number 25 currently, according to Knight Frank. These are at various phases of construction with Western Saudi Arabia a 'focus of development with plans valued at $692 billion, accounting for 55 per cent of the total $1.25 trillion development plan'.
"The region is expected to see extensive growth in luxury residential supply and hotel accommodation, as well as retail, and office space," says Knight Frank in the report.
"Giga projects are undoubtedly transforming the Kingdom's urban landscape," said Amar Hussain - Associate Partner, Research at Knight Frank. "Arguably one of, if not the most expansive, real estate development programs ever seen in the world is gathering pace in Saudi Arabia as the 2030 deadline nears to realise Vision 2030."
More to follow...