Since the “National Transformation Plan” was introduced in 2016, Saudi Arabia has invested $1.1 trillion in infrastructure and real estate developments, surpassing the $1 trillion mark. The kingdom recently confirmed “The Line” as a component of its already enormous NEOM development, adding to the list of “Giga” projects.
“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.
The largest of the group, NEOM will eventually house 9 million people over an estimated 300,000 new dwellings. “Just $7.5 billion of sub-projects have been commissioned thus far, with the construction progress of this tranche of projects standing at 29 percent,” said de Jong.
World’s biggest ‘construction site’
By 2030, Saudi Arabia will have constructed more than 555,000 homes, 275,000 hotel keys, and 4.3 million square meters of new retail space. Additionally, there will be an extra 6.1 million square meters of office space.
“The planned construction will easily make Saudi Arabia the largest construction site the world has ever known,” said Durrani.
And not all of the activity takes place at NEOM. By the time it is finished in 2027, the $20 billion Diriyah Gate will have added 20,000 dwellings to Riyadh’s residential stock. With the $5 billion already spent, according to Knight Frank, 46% of the construction has been completed.
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 percent 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
Understandably, Riyadh is expected to see “explosive growth,” with its population expected to rise from approximately 7.5 million in the present to 17 million by 2030. The Knight Frank research states that since 2016, the city has seen real estate developments worth a combined $104 billion launched.
In addition, a new airport worth $147 billion will be built; specifics will be made public. (The airport represents over 74% of the $200 billion in infrastructure spending by the Saudi government.)
“Riyadh’s repositioning as a commercial nerve center of the Kingdom is well underway,” said Durrani. “And businesses from the world over are already clamoring to be at the center of the Middle East’s second and much-needed global hub.
“With Grade A office occupancy levels across the city hovering at around 97 percent, the planned development of a further 2.8 million square meters 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 percent higher than this time last year.”