Saudi construction output value soars to $148bn, says report
LONDON, 19 hours, 30 minutes ago
Growth in Saudi Arabia’s construction activity shows no signs of slowing, with the construction output value for the construction, transport, power, oil & gas, industrial, water and chemical sectors reaching $148 billion in the first half of 2024, up 4.6% compared to the same period the previous year, according to global property consultancy Knight Frank.
Knight Frank’s analysis shows that the Saudi construction sector has been growing year-on-year since 2020 and forecasts this upward trajectory will continue, hitting $191 billion in 2029.
This phenomenal level of development is being driven by the government’s Vision 2030 strategy to position the kingdom as a global hub for tourism, commerce and trade, stated Knight Frank in its latest Saudi Arabia Construction Landscape Review.
This transformation aims to deliver over 1 million homes, more than 362,000 hotel keys, over 7.4 million sqm of retail space, and more than 7.7 million sqm of new office space by the end of the decade, it added.
Faisal Durrani, Partner – Head of Research, Mena, said: "Construction contracts totalling more than $215.4 billion were awarded across Saudi Arabia between 2020 and 2025, highlighting the government’s incredible ambition and commitment to making the Kingdom the centre of wealth generation and trade not just in the GCC but globally."
"Indeed, some $1.3 trillion is planned to be invested in real estate and infrastructure projects as part of Vision 2030, highlighting the breadth and scale of what is now being delivered," stated Durrani.
Riyadh remains a centre of construction activity, with $135.2 billion of contracts awarded since 2020, representing 63% of the total across the kingdom.
The capital’s $195 billion development plan includes 4.6 million sqm of office space, 2.6 million sqm of retail, more than 28,800 hotel rooms and over 340,000 homes.
Anticipating the sharp increase in businesses, residents and tourists this level of development will attract, almost $24 million (29%) of construction contracts awarded in Riyadh have been for transport projects.
The $22.5 billion Riyadh Metro project features six lines spanning 176 km with 85 stations and fully automated, driverless trains.
Alongside this, the King Abdulaziz Public Transport Project will create a comprehensive bus rapid transport system, while more than US$ 5bn is being spent on major road projects to support the city’s expansion.
Mohamed Nabil, Regional Partner - Head of Project and Development Services, Mena, said: "With the population of Riyadh projected to increase to 10 million by 2030, the city’s transport upgrade programme is one of the largest and most innovative in the world."
"Although the car is still the dominant form of transport, the investments being made in Riyadh’s Metro and rapid transport system show how the city is redefining the urban experience through sustainable development to create not only a liveable city, but also an attractive destination for business and tourism," noted Nabil.
Amar Hussain, Associate Partner – Research, Middle East, said: "Giga projects are a major hub of construction activity. For example, the $50 billion New Murabba project will transform 19 sq km of north-west Riyadh, creating 18 new neighbourhoods.
In Western Saudi Arabia, a $685.5 billion real estate development plan centred on giga projects will deliver more than 382,000 homes, 330,000 hotel rooms, and office and retail space spanning upwards of 7.3 million sqm, stated Hussain.
"These projects are designed on a scale far beyond anything else currently under construction in EMEA, and this bold vision is rapidly becoming reality, bringing benefits to Saudi residents and businesses alike," he added.-TradeArabia News Service
