The construction industry in Saudi Arabia is witnessing unprecedented growth, driven by huge investments in infrastructure and real estate projects.
Significant growth in construction contracts
A press release from real estate consultancy Knight Frank reveals that construction contracts totaling more than SAR 807.75 billion have been awarded across all regions of the Kingdom over the past five years; this growth underscores Saudi Arabia's commitment to strengthening its construction capacity to support economic expansion.
Real estate consultancy Knight Frank's press release reveals that construction contracts worth a total of more than SAR 807.75 billion have been awarded across all regions of the Kingdom over the past five years.
In the context of this growing interest in the construction sector, Knight Frank observed that the value of construction output in Saudi Arabia's construction, transportation, energy, oil and gas, industrial, water, and chemicals sectors reached SAR 555 billion by the end of last year, an increase of 4.6% compared to the previous year. The sector has recorded year-on-year growth, and this upward trajectory is expected to continue to reach SAR 716.2 billion by 2029.
Promising future outlook
<According to Khalid Al-Falih, Minister of Investment, the value of construction contracts for projects to be awarded in the coming years is expected to range between $1.6 trillion and $1.8 trillion, with the construction sector in Saudi Arabia reaching $152 billion, with capital spending targeted to exceed $3.3 trillion from 2022 to 2030. These figures reflect the Kingdom's great ambition in developing its infrastructure.
Performance of construction sectors
Riyadh tops investments
<According to Faisal Durrani, Partner and Head of MENA Research at Knight Frank, Riyadh accounted for the lion's share of the contracts distributed across the Kingdom, with SAR 507 billion worth of contracts, representing 63% of the total contracts across Saudi Arabia. Transportation projects accounted for 29% of the construction contracts awarded in the capital. The investment of some $1.3 trillion in real estate and infrastructure projects is a key part of Vision 2030, highlighting the size and scope of the projects underway.
Investment opportunities for construction companies
<Observers believe that the Saudi market has the potential to absorb at least 20 to 30 highly specialized and efficient construction companies in the next two to three years. This absorption aims to meet current and future demand and keep pace with Saudi Arabia's developmental transformation, which aims to provide more than one million homes, more than 362,000 hotel rooms, more than 7.4 million square meters of retail space, and more than 7.7 million square meters of new office space by the end of the decade.
Observers believe that the Saudi market has the capacity to absorb at least 20 to 30 specialized and efficient construction companies in the next two to three years.
