Sign in
The value of Saudi’s construction sector output rose 4.3% y-o-y to USD 141.5 bn in 2023, according to Knight Frank’s latest figures (pdf). Saudi’s construction output value is expected to hit USD 181.5 bn by 2028, Knight Frank expects, with more or less the same breakdown of sectoral contributions.
By the numbers: The residential sector saw the most awards at USD 43.5 bn — projected to reach USD 57 bn by 2028. This is followed by the energy and utilities sector, which raked in USD 35 bn, and is also expected to rise in the same period to USD 46.5 bn. Currently, the construction cost per square meter lies between SAR 3.8 and SAR 10k, which makes Riyadh the most expensive city in the Middle East in which to build real estate.
REMEMBER- Real estate has been the main driver for inflation in the Kingdom as rental prices climbed 10.5% y-o-y in May as growing demand for office space amid Saudi’s regional headquarters program is driving up prices with supply coming up short.
Riyadh leads the pack: Riyadh accounted for 38% of existing contract awards with a total of USD 54 bn — more than any other Saudi city. Makkah and Tabuk followed Riyadh in contract awards, landing around USD 28 bn each. Construction projects in Riyadh are expected to continue growing over the next several years, with Saudi Vision 2030 penciling in a USD 229 bn real estate development plan for the capital city that includes delivering 20k hotel keys, 241k residential units, and a combined 6.4 mn sqm of office and retail space.
No slowing down: “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 realize Vision 2030,” said Knight Frank Associate Partner Amar Hussain. The Kingdom is looking to attract upwards of USD 3 tn in investments by 2030, “a figure recently confirmed by the Minister of investment during the inaugural Sino-Gulf Cooperation for Industries and Investments Forum in China last month,” said Mohamed Nabil, regional partner at Knight Frank.
Saudi’s Vision 2030 has a budgeted value that has surpassed USD 1.3 tn since its inception in 2016, 55% of which is currently under construction across 25 gigaprojects valued at USD 692 bn, according to a press release picked up by Zawya.
