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Riyadh, Saudi Arabia. Image used for illustrative purpose. Getty Images
Saudi Arabia has awarded construction deals with a combined value of $250 billion in just a few years to implement mega projects in line with the kingdom’s ambitious Vision 2030 strategy.
The projects have been commissioned to contractors since 2016, when the Gulf state unveiled its plan to transform the kingdom. Since then, around $1.25 trillion worth of real estate and infrastructure projects have been launched, according to global real estate consultancy Knight Frank.
“Arguably one of, if not the most expansive real estate development programs ever seen in the world is gathering pace in Saudi Arabia as the 2030 deadline nears to realise Vision 2030,” said Faisal Durrani, Knight Frank’s Partner – Head of Research, Middle East & North Africa.
Saudi Arabia, which was the fastest-growing G20 economy in 2022, has rolled out several reforms and initiatives aimed at moving away from its dependence on oil revenues.
Central to the plan is to build new infrastructure, residential homes, hotels and other hospitality and entertainment destinations that will attract more international visitors and boost consumer spending.
The most prominent project the kingdom has unveiled so far is the supercity called Neom, estimated to cost $500 billion.
Over the course of the last year, Saudi has announced various subcomponents in Neom, including Trojena, the venue for the 2030 Asian Games and Sindalah, the luxury island and hospitality destination in the Red Sea.
Around $70 billion of the projects at Neom have been commissioned, nearly half (45%) of which has been completed.
Residential, commercial space
Overall, the volume of homes the state plans to build has reached 660,000, up by 30% in the last 12 months, while around 300,000 square metres of office space have already been completed since last autumn, according to Knight Frank.
On the retail front, around 5.3 million square metres have been planned, while a further 289,000 hotel rooms are envisioned, as the kingdom looks to host 100 million visitors by 2030.
A huge chunk of the projects will be seen in Western Saudi, where $687 billion worth of real estate will be turned over by the end of the decade.
The first three months of 2023 saw some 7.8 million tourists visiting Saudi Arabia, the highest in a quarter. It marked a 64% increase compared to pre-pandemic levels.
The International Monetary Fund (IMF) recently said that Saudi Arabia’s ongoing economic transformation has helped the kingdom create “high growth, record low unemployment, contained inflation and strong external and fiscal buffers, while reducing reliance on oil”.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
