Dubai: Saudi Arabia’s investments into real estate and infrastructure projects since launching the ‘National Transformation Plan’ in 2016 has crossed the $1 trillion mark, and is now at $1.1 trillion. And the number of ‘giga’ projects keep getting added to, with the kingdom recently confirming ‘The Line’ as part of its already massive NEOM development.
“We are currently tracking 15 giga projects in various phases of construction around the Kingdom, many of which are new standalone super-cities in their own right,” said Harmen de Jong, Partner – Head of Real Estate Strategy & Consulting, Saudi Arabia.
NEOM still is the biggest of the lot, and will house 9 million residents on completion across an estimated 300,000 new homes. “Just $7.5 billion of sub-projects have been commissioned thus far, with construction progress of this tranche of projects standing at 29 per cent,” said de Jong.
World's biggest 'construction site'
Saudi Arabia is building over 555,000 residential units, more than 275,000 hotel keys, and 4.3 million square metres of new retail space by 2030. Plus, there will be over 6.1 million square metres of additional office space.
"The planned construction will easily make Saudi Arabia the largest construction site the world has ever known," said Durrani.
And it’s not all the action being at NEOM. The $20 billion Diriyah Gate will add 20,000 homes to Riyadh’s residential stock by the time it is completed in 2027. Knight Frank estimates 46 per cent of construction is done with the $5 billion spent so far.
What 30% of Saudi citizens are prepared to spend on a second home in the Kingdom
Some heavy spending ahead on homes
“With NEOM being positioned as a crown jewel in the transformative plans, people are eager to be part of history,” said Faisal Durrani, Partner – Head of Middle East Research at Knight Frank. “Super-cities like NEOM will redefine urban living in a spectacular way, while meaningfully embracing sustainability in a resource hungry region.
“Sub-cities like The Octagon, Trojena and The Line will set new benchmarks for luxury living in the region and with close to 30 per cent of homeowners in Saudi prepared to spend upwards of $800,000 on a second home in the Kingdom, developers have their work cut out to satisfy this pent-up demand.”
Riyadh getting homes - and airport
Riyadh, understandably, is set for ‘explosive growth’, with the population projected to hit 17 million by 2030, up from around 7.5 million now. According to the Knight Frank report, the city has seen real estate projects of a combined $104 billion being announced since 2016.
There will also be a new airport worth $147 billion, details of which are to be revealed. (The airport accounts for close to 74 per cent of the $200 billion infrastructure spend by the Saudi authorities.)
"Riyadh’s repositioning as a commercial nerve centre of the Kingdom is well underway," said Durrani. "And businesses from the world over are already clamouring to be at the centre of the Middle East’s second and much-needed global hub.
"With Grade A office occupancy levels across the city hovering at around 97 per cent, the planned development of a further 2.8 million square metres of world-class office space couldn’t come sooner. The city is also attracting a huge number of internal migrants and with readily available support to get on the housing ladder, house prices are rising rapidly and currently stand some 26 per cent higher than this time last year.”