Over $1.1tn in real estate and infrastructure projects currently underway in Saudi Arabia
The firm says it is tracking 15 giga projects all of which are in various phases of construction
Since the launch of Saudi Arabia’s National Transformation Plan in 2016, the total value of real estate and infrastructure projects has crossed US $1.1tn as per Knight Frank. A spokesperson said the “phenomenal transformation” taking place in Saudi Arabia is clearly visible across the entire urban landscape.
“With over 555,000 residential units, more than 275,000 hotel keys, in excess of 4.3m sqm of retail space and over 6.1m sqm of new office space expected by 2030, the planned construction in the Kingdom will easily make Saudi Arabia the largest construction site the world has ever known. What’s more, healthcare, education and wellbeing sit at the core of the transformative plans, which will contribute to an extraordinary evolution in the Kingdom’s physical realm, making it un-recognisable from what we see today by the end of the decade,” says Faisal Durrani, Partner – Head of Middle East Research at Knight Frank.
The firm said it is tracking 15 giga projects in various phases of construction around the Kingdom and notes that many are stand-alone super-cities in their own right.
In an exclusive to Middle East Construction News (MECN), Ian Williamson, Group Chief Projects Delivery Officer at The Red Sea Development Company reflected on the project’s numerous achievements over the past five years.
Harmen de Jong, Partner – Head of Real Estate Strategy & Consulting, Saudi Arabia notes, “NEOM remains the largest giga-project announced to date, and it has been recently publicised that it will house nine million residents on completion across an estimated 300,000 new homes. However, just $7.5bn of sub projects have been commissioned thus far, with construction progress of this tranche of projects standing at 29%.”
Durrani adds, “Vision 2030 has lit the embers of excitement across the Kingdom and with NEOM being positioned as a crown jewel in the transformative plans, people are eager to be part of history. Super-cities like NEOM will redefine urban living in a spectacular way, while meaningfully embracing sustainability in a resource hungry region. Sub-cities like Oxagon, Trojena and The Line will set new benchmarks for luxury living in the region and with close to 30% of home-owners 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.”
Away from NEOM, the $20bn Diriyah Gate is one of the Kingdom’s other projects of significant size. The historic district of Diriyah will add 20,000 homes to Riyadh’s residential stock by the time it is completed in 2027, the firm said. It estimates that 46% of construction has been completed on the $5bn spent so far.
In May 2022, Diriyah Gate Development Authority said it would transform Wadi Hanifah into a nature-focused getaway. In August, Saudi-based developer Dar Al Arkan said it was eyeing aggressive regional and international expansion.
The firm also says that Riyadh is poised to undergo significant growth, with the population projected to close in on 17mn by 2030, up from around 7.5mn today. To meet this ambitious growth target, the city has seen real estate projects worth $104bn unveiled over the last six years. Furthermore, Knight Frank points to plans for a brand-new international airport worth $147bn, details of which are expected soon. The new international airport accounts for close to 74% of the $200bn nationwide infrastructure spend, it says.
Sustainability is a key theme for Riyadh, Knight Frank comments, citing recent plans for the 10sqkm ALNAMA Smart City, which will be the capital’s first zero-carbon city, and expected to house some 44,000 people when complete.
Durrani continues, “Not to be outdone, Riyadh’s repositioning as a commercial nerve centre of the Kingdom is well underway. 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. Indeed, with Grade A office occupancy levels across the city hovering at around 97%, the planned development of a further 2.8mn sqm 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% higher than this time last year.”
Big Project Middle East will host its Construction Intel Summit – KSA in the Kingdom on November 23 in Riyadh. Registration is complementary for construction professionals.
Knight Frank also explains that significant focus is being placed on the well-being of the Kingdom’s residents through the improvement and provision of world-class urban environments. This includes the $500mn Riyadh Sports Boulevard, as well as the $23bn ‘Green Riyadh’ which will transform the Saudi capital into a verdant metropolis through the planting of 7.5m trees. Elsewhere, Dammam’s 650,000 sqm Amanat Al Sharqiya project will see the revitalisation of the city’s corniche.
“The emphasis on wellbeing extends to the 19,000 hospital beds planned, which is set to cost $13.8bn, $8.6bn of which is planned for the Riyadh Province alone. Furthermore, over 80 new educational institutions are being built at a cost of $82bn,” de Jong concluded.
Early in September, the National Real Estate Registration Services Company was launched in the Kingdom to digitalise and develop the real estate sector.
