Over the past eight years, Saudi Arabia has invested $1.3 trillion in real estate and infrastructure projects as part of its strategy to diversify its economy away from oil and make it a more desirable destination for business, travel, and residence.
As per Knight Frank, the number of projects has increased by 4% in comparison to the previous year. This includes megadevelopments like Neom on the Red Sea coast and over a million residential units, according to the real estate consulting group’s most recent Saudi Giga Projects Report.
Since 2016, when Saudi Crown Prince Mohammed bin Salman bin Abdulaziz unveiled his plan to wean the nation off its reliance on petrodollars and enhance the standard of living for citizens, about $164 billion worth of real estate contracts have been awarded.
Neom gets chunk of investments
The majority of that money—$28.7 billion—went to Neom, which heavily invested in the construction of The Line, a pair of mirror-clad towers that are eventually anticipated to be around 105 miles long.
According to Knight Frank, the National Housing Co. ($12 billion), the development of Diriyah Gate ($9 billion), and the entertainment city of Qiddiya in Riyadh ($nearly $7 billion) are the other projects with the highest awards to date.
Biggest construction market
Even though a lot of massive projects are still years away from completion, the kingdom is working nonstop to find solutions for issues with labor, supply chains, and costs in order to reach goals. Since most developments are scheduled for completion between 2028 and 2030, Saudi Arabia is expected to overtake all other countries as the world’s largest construction market as it approaches these deadlines.
With approximately $35 billion in contracts awarded thus far, Riyadh continues to be a focal point. By the beginning of the next decade, the capital is anticipated to add 340,000 homes, 4.6 million square meters of office space, and nearly 29,000 hotel rooms, according to Knight Frank. The company stated that as the city gets ready to host the FIFA World Cup in 2034 and the World Expo in 2030, there will be an additional “slew of new developments.”
Knight Frank stated that over $54 billion has been allocated to the western coast of Saudi Arabia and its environs, where a minimum of 17 giga projects are presently in progress.
Economic diversification
A large portion of Saudi Arabia’s building is intended to accommodate the nation’s expanding population, encourage investment and tourism, and support the country’s economic diversification.
By 2030, the kingdom wants to welcome 150 million tourists annually and bring in $100 billion in foreign direct investment. The majority of the 109 million tourists that visited there last year were locals.
By the end of the decade, 362,000 new hotel rooms are anticipated to be built across the nation to accommodate the anticipated increase in tourists. According to Knight Frank, the $110 billion “ambitious pipeline” will require the construction of more mid-market buildings rather than 4- and 5-star hotels in order to attract a broader spectrum of travelers.
“This will be key in ensuring the 150 million 2030 visitor target is achieved,” the firm said.
