Saudi construction surge draws interest from around the world

Shutterstock/Bell Ka Pang

• Rapid growth in Saudi construction
• Local supply insufficient
• Small companies hope to fill gap

Brazil’s ProMarmo, a small family-owned supplier of marble, onyx and granite, has just two branches, both in the southern Brazilian state of Rio Grande do Sol.

After more than 20 years in business, the company is considering opening its third branch in none other than distant Saudi Arabia.

Growing numbers of small construction companies, contractors and materials suppliers from around the world are entering the Saudi market for the first time or expanding their existing foothold, looking to capitalise on opportunities in the Gulf’s largest construction market.

That market could even grow to be the world’s largest in 2028, according to real estate consultancy Knight Frank.

Saudi companies and suppliers in other parts of the six-member Gulf Cooperation Council are unable to fully meet Saudi demand, offering an opportunity to others beyond the region.

The Vision 2030 economic and social development strategy “is going to create a lot of demand,” says ProMarmo commercial director Rafael Tonello Rizzardo.

“Saudi companies cannot provide for all the buildings that are coming so I think that, for the next few years, they will be very open to foreign companies.”

Even excluding flagship projects such as Neom, Saudi Arabia is home to at least six giga-projects, so called because they are monumental in terms of either physical structure or financial investment.

Construction, for instance, is under way in preparation for the 2029 Asian Winter Games, Expo 2030, and the Fifa World Cup 2034. 

Meanwhile, the country’s population of 34 million is growing, and could add 13 million more people over the next 25 years. In line with this, the number of Saudis looking to buy their own home for the first time is also expanding. As a result, suppliers to the construction industry are struggling to keep up.

“Before 2023, the demand for glass and aluminium was very small,” says Mahmoud Sobhy, operations manager at Delemar for Processed Glass, a company based in Egypt. “Now, demand is increasing and the industry is growing.” 

Present in Saudi Arabia, importing glass and aluminium products from a facility just outside Cairo, Delemar is now considering establishing a factory close to Riyadh to add capacity and shorten supply times.

“Even if our project is successful, it won’t be able to keep pace with demand,” said Sobhy. “The demand is so great and the number of manufacturers currently in Saudi Arabia is very low.”

According to Knight Frank, the kingdom needs to build 115,000 residential units a year to meet the demand for homes.

This is over and above growing demand for office, industrial and commercial units. More, too, than the giga-projects, other infrastructure projects are also under way across the country including additions to the new Riyadh Metro, new ports and highways, 11 stadiums, and the King Salman International Airport, which is slated to be one of the largest in the world.

Amid this explosion in construction, the value of construction contracts awarded every year has almost tripled over the last decade from $55 billion in 2014 to $142 billion in 2023, according to Knight Frank. 

That could reach $182 billion in 2028, potentially making Saudi Arabia the biggest construction market in the world.

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Saudi Arabia overtook long-time leader the UAE to be the biggest construction market in the GCC in 2019. 

Today the largest Arab economy accounts for around 40 percent of the total value of construction contracts across the trading bloc.

Companies from China, Turkey, India and elsewhere that once may have looked to enter the Gulf through Dubai are now increasingly looking to Riyadh as the first port of call.

Aldowa, a Dutch architectural firm that builds bespoke building facades, began planning an expansion into the Gulf shortly after the Covid-19 pandemic. After opening in the UAE in 2023, most of its orders are now coming in from Saudi Arabia.

“We started two years ago because we knew that something was going to happen now or two years down the line,” says Amir Atmane, a senior project manager at Aldowa. “So if somebody didn’t start two years ago, now it’s kind of a bit late”.

Although Aldowa is already selling to Saudi Arabia from Dubai, Atmane says it is now considering setting up a legal presence in Riyadh.

Saudi Arabia is “really on the way up in every aspect,” says Atmane.