‘The biggest construction site the world has ever seen’

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• 555k homes, 275k hotel keys expected in Saudi by end of decade
• Knight Frank tracking 15 giga projects including super-cities
• Riyadh population projected to rise to 17m by 2030 from 7.5m today

Saudi Arabia was described on Tuesday as the biggest construction site the world has ever seen as projects valued at over $1.1 trillion are underway in the kingdom. 

That’s the total value of real estate and infrastructure projects since the launch of Saudi Arabia’s National Transformation Plan in 2016, according to global real estate consultancy Knight Frank.

Faisal Durrani, partner – head of Middle East Research said: “A bold new vision is unfolding in Saudi Arabia. The phenomenal transformation taking place in the world’s fastest growing economy is clearly visible across the entire urban landscape. 

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“With over 555,000 residential units, more than 275,000 hotel keys, in excess of 4.3 million sq m of retail space and over 6.1 million sq m 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 unrecognisable from what we see today by the end of the decade.”

His comments come a week after US commercial real estate services and investment firm CBRE’s new Saudi country head Pedro Ribeiro told AGBI that the kingdom must now start to deliver on its promises following the announcement of many projects including the $500 billion NEOM, Qiddiya, the Red Sea Project and the transformation of Diriyah.

He said Saudi Arabia is entering a crucial part of its ambitious Vision 2030 programme, described by Ribeiro as the “moment of accountability”.

Knight Frank is tracking projects in various phases of construction around the kingdom.

Harmen de Jong, Partner – Head of Real Estate Strategy and Consulting, Saudi Arabia, added: “We are currently tracking 15 giga projects in various phases of construction around the kingdom, many of which are new stand-alone super-cities in their own right. 

“NEOM remains the largest giga-project announced to date, and is expected to house nine million residents on completion across an estimated 300,000 new homes. 

“However, just $7.5 billion of sub projects have been commissioned thus far, with construction progress of this tranche of projects standing at 29 percent.”

Durrani added: “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.”

Away from NEOM, the $20 billion Diriyah Gate is another of the kingdom’s colossal projects. The city-sized historic district of Diriyah will add 20,000 homes to Riyadh’s residential stock by the time it is completed in 2027. 

Knight Frank said it estimates that 46 percent of construction has been completed on the $5 billion spent so far. 

Riyadh itself is poised to undergo explosive growth, with the population projected to close in on 17 million by 2030, up from around 7.5 million today.

The city has seen real estate projects worth $104 billion unveiled over the last six years with plans for a new international airport worth $147 billion, details of which are expected soon. 

Knight Frank said the new international airport accounts for close to 74 percent of the $200 billion nationwide infrastructure spend.

Durrani said: “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 percent, the planned development of a further 2.8 million sq m 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.”  

Knight Frank also highlighted the emphasis being placed on the wellbeing of the kingdom’s residents through plans such as the $500 million Riyadh Sports Boulevard as well as the $23 billion Green Riyadh and Dammam’s 650,000 sq m Amanat Al Sharqiya project.

“This emphasis on wellbeing extends to the 19,000 hospital beds planned, which is set to cost $13.8 billion, $8.6 billion of which is planned for Riyadh Province alone. Furthermore, over 80 new educational institutions are being built at a cost of $82 billion,” explained de Jong.

Since Vision 2030 was unveiled by the Crown Prince in 2016, the country has sought to create a progressive kingdom capable of tapping into its social, cultural and economic potential. 

The scale of the undertakings has boosted construction growth in the kingdom. According to MEED, projects with a combined value of $41.3bn were awarded in 2021.