Saudi Arabia's construction industry remains active with an unabated flow of new contracts
Saudi Arabia is witnessing an unprecedented surge in construction activity as part of its Vision 2030 strategy, aimed at economic diversification and modernisation. The kingdom is investing heavily in various sectors, with major projects underway in real estate, tourism, industry, and infrastructure.
The construction sector alone is expected to reach a staggering value of $191 billion by 2029, according to Knight Frank, a global real estate consultancy firm. This growth is evident in the $148 billion worth of construction contracts awarded up to the first six months of 2024, marking a 4.6% increase.
In the realm of real estate and infrastructure, an estimated $1.3 trillion is planned to be invested. This investment will deliver over 1 million homes, more than 362,000 hotel keys, over 7.4 million square meters of retail space, and more than 7.7 million square meters of office space by 2030.
One significant project is the $685.5 billion real estate development plan in Western Saudi Arabia, which is being designed on a scale far beyond anything else currently under construction in the EMEA region. This plan includes the creation of over 340,000 homes, more than 28,800 hotel rooms, and 4.6 million square meters of office space, 2.6 million square meters of retail space in Riyadh.
The city of Riyadh is also set to receive a significant boost with the $50 billion 'New Murabba' project, which will transform 19 square kilometres of north-west Riyadh, creating 18 new neighbourhoods.
Tourism and entertainment megaprojects are another focus area. Key flagship projects include NEOM, a $500 billion smart city focusing on renewable energy and AI; The Red Sea Project, a luxury tourism zone spanning 28,000 km²; Qiddiya, a new entertainment, sports, and cultural hub; and King Abdullah Economic City, a logistics and industrial hub.
The industrial and manufacturing sectors are also seeing significant investments. The government is promoting localization of production with industrial incentives, supporting industries such as building materials, smart factories, and digital manufacturing. Industrial clusters at sites like NEOM’s Oxagon, Jubail, and Yanbu are being fast-tracked with ready infrastructure to attract private investment.
Moreover, the construction sector in Saudi Arabia is not limiting its focus to physical projects. Vision 2030 also supports the digital economy through fintech innovation, cloud computing, and SaaS platforms, with reforms allowing full foreign ownership in technology sectors. The government’s Cloud-First Policy accelerates demand for digital solutions aligned with economic diversification aims.
Transport projects are also a major hub of construction activity. The King Abdulaziz Public Transport Project in Riyadh, for instance, will create a bus-based rapid transport system. Meanwhile, the Riyadh Metro project, with a value of $22.5 billion, features six lines covering 176 kilometers with 85 stations and automated, driverless trains.
In conclusion, Saudi Arabia's Vision 2030 is catalysing massive investments in real estate, tourism megaprojects, industrial development with smart technologies, and robust infrastructure expansion. The aim is to transform the Kingdom into a global hub for commerce, tourism, and advanced manufacturing by 2030.
- The growth in Saudi Arabia's real estate sector is significant, with a forecast of reaching a value of $191 billion by 2029 as part of the Vision 2030 strategy.
- The kingdom's finance sector is also impacted by these investments, with an estimated $1.3 trillion planned for real estate and infrastructure projects by 2030.
- Beyond the construction sector, Saudi Arabia is also investing in industries like tourism, entertainment, and manufacturing. Notable projects include NEOM, The Red Sea Project, and Qiddiya.
- Vision 2030 also emphasizes the development of the digital economy, with reforms allowing full foreign ownership in technology sectors and a push for fintech innovation, cloud computing, and SaaS platforms.
